An HSA from Omnify is a personal savings account that can be used to pay for medical, dental, vision, and other qualified expenses now or later in life. HSAs allow you to save money by reducing your taxable gross income, spending pre-tax dollars for healthcare, and growing your HSA dollars tax-free.
Since it’s a savings account, you’re encouraged to save more than you spend. Unlike flexible savings account funds, which are “use it or lose it,” your HSA balance rolls over from year to year, earning interest along the way. The funds can even be invested, making it a great addition to your retirement portfolio.* The account is portable, meaning if you ever leave your employer, you can take the HSA with you because it’s your money and your account.
*Investment products: Not FDIC Insured - No Bank Guarantee - May Lose Value
If you meet all the criteria listed below and neither you nor your spouse has currently elected a medical FSA, you’re eligible to open and contribute to an HSA.*
You’re covered by a qualified HDHP on the first day of a given month
You’re not covered by another non-HDHP, such as a health plan sponsored by your spouse’s employer
You’re not enrolled in Medicare or TriCare
You haven’t received VA benefits at any time during the preceding three months; if you’re a veteran with a service-connected disability, this exclusion doesn’t apply
You’re not claimed as a dependent on another individual’s tax return
*Other exceptions & restrictions may apply. Please consult a tax or legal professional to discuss your personal circumstances.
Nonqualified distributions will be subject to ordinary income tax and, in some cases, a 20% penalty. The only time tax is ever owed on principal or interest from your HSA is if the money is distributed for nonqualified expenses before you reach age 65, become disabled, or die. Even if you use the funds for nonqualified expenses after you’re 65 or disabled, you’ll only be subject to ordinary income tax on the money you withdraw without the 20% penalty.
Below is a quick reference list of expenses that can be reimbursed from a health savings account. For more detailed information, please refer to IRS publications 969 and 502. For tax advice, please seek the services of a competent tax professional.
A flexible spending account (FSA) from Omnify is an employer-sponsored benefit that lets you pay for eligible medical expenses on a pre-tax basis. If you expect to incur medical expenses that won’t be reimbursed by another plan, FSAs are a great way to save money while covering those costs.
Flexible spending accounts reduce your taxable income by setting aside pre-tax dollars to pay for eligible healthcare expenses.
You can contribute up to the IRS annual limit to your FSA. This annual election amount will be deducted evenly out of each paycheck on a pre-tax basis and deposited into your FSA. You can then use the funds to pay for eligible expenses. Changes to the annual election amount are only permitted due to a change of status, such as a marriage or the birth of a child.
One big perk to an FSA is that it’s pre-funded, meaning you’ll have access to your full annual election amount at the very beginning of the play year, regardless of the amount contributed to date. This can be used to pay for dental, vision, and medical expenses tax-free.
Any unused funds at the end of the plan year are forfeited — also called the “use it or lose it” rule — so be sure you’re only allocating dollars for predictable medical, dental, or vision expenses. Keep in mind, you may have a carryover or grace period at the end of the plan year. Check the summary plan document your employer provided.
Elections can only be altered if you experience a change in status as defined by IRS regulations, such as a marriage, divorce, birth, or death in your immediate family.
Participation in your FSA is also terminated. This means that only expenses that were incurred prior to your termination date are eligible for reimbursement.
If you have a benefits debit card, simply swipe it at the register. Otherwise, just file a claim including the receipt documenting the patient name, provider, date and type of service, and cost. Once approved, your reimbursement will be direct deposited into your bank account.
Your Healthcare FSA is funded through your employer. Your annual election will be divided by the number of pay periods in your plan year. This amount will be deducted from your paycheck before taxes are assessed.
Below is a quick reference list of expenses that can be reimbursed from a flexible spending account. For more detailed information, please refer to IRS publications 969 and 502.
** Stockpiling of over the counter (OTC) items is not permitted, and expenses resulting from stockpiling are not reimbursable. When purchasing OTC items there must be a reasonable expectation that such items can be used during the plan year. Buying more than three of the same item in any one transaction is considered stockpiling and will not be reimbursed.
Participation in your LPFSA is also terminated. This means that only expenses that were incurred prior to your termination date are eligible for reimbursement.
Any unused funds at the end of the plan year are forfeited — also called the “use it or lose it” rule — so be sure you’re only allocating dollars for predictable dental and vision expenses. Keep in mind, you may have a carryover or grace period at the end of the plan year. Check the summary plan document your employer provided.
A Limited Purpose Flexible Spending Account, or LPFSA, from Omnify is an employer-sponsored benefit that allows you to pay for eligible dental and vision expenses on a pre-tax basis. If you expect to have dental and vision expenses that won’t be reimbursed by another plan, LPFSAs are a great way to save money while covering those costs.
Below is a quick reference list of expenses that can be reimbursed from an LPFSA. For more detailed information, please refer to IRS publications 969 and 502.
Typically, you can’t change your contribution amount mid-year. However, if you experience a qualifying event — such as the birth of a new child — or if your child care provider has a change in cost, you may be eligible to adjust your contribution.
Any unused funds at the end of the plan year are forfeited — also called the “use it or lose it” rule — so be sure you’re estimating conservatively when you make your annual elections.
Yes. You can’t use funds to pay for care provided by a spouse, a person you list as a dependent for income tax purposes, or one of your children under the age of 19.
Care expenses that are not eligible to be paid with DCFSA funds include care for children over age 13, overnight camps, babysitting that is not work-related, school fees for kindergarten and higher grades, and long-term care services.
Eligible expenses must be for the purpose of allowing you to work or look for work. Services may be provided at a child or adult care center, nursery, preschool, after-school, summer day camp, or a nanny in your home.
You can use your DCFSA to pay for care for children under age 13 who you claim as dependents, as well as adults or other relatives who are incapable of caring for themselves (if you provide more than 50% of their support).
A dependent care flexible spending account, or DCFSA, is a flexible spending account that lets you set aside pre-tax dollars for dependent care expenses. DCFSA contributions deducted from your paycheck are tax-free and remain tax-free when spent on eligible dependent care expenses.
An HDHP is a health insurance policy that offers higher deductibles and lower premiums than a traditional insurance plan. Like a traditional plan, you’re responsible for paying for your qualified medical expenses up to the deductible. After the annual deductible is met, you’re responsible only for a portion of your medical expenses through coinsurance or copayments. A qualified HDHP can be combined with an HSA to offer a tax-advantaged way to help pay for the medical expenses you may incur.
Your HSA is portable, so funds are never lost due to changes in your employment or health insurance. If at some point you’re no longer covered by an HDHP, you’ll still have access to your funds to pay for qualified medical expenses. However, you’ll no longer be eligible to make contributions.
No, you don’t need to submit any receipts to us. However, be sure to save receipts on any qualified medical expenses paid out of your HSA for tax purposes.
IRS Form 1099-SA: This form reports any distributions from your health savings account (HSA) from the prior year. If you had distributions from your account, Omnify will issue this tax form by the end of January. It will be available online via the Omnify portal and mailed, if elected. Important: If you did not have any distributions in the previous tax year, you will not receive this form.
IRS Form 5498-SA: This form reports any regular and rollover contributions made to your HSA in the prior year through the tax deadline of the current year (2023 tax filing deadline is April 15, 2024). Form 5498‑SA also reports the fair market value for your health savings account as of December 31. Omnify will issue this tax form by the end of May. It will be available online via the Omnify portal and mailed, if elected. Important: Form 5498-SA is informational only; you do not need to file it with your tax return.
Nonqualified distributions will be subject to ordinary income tax, and in some cases, a 20% penalty. The only time tax is ever owed on principal or interest from your HSA is if the money is distributed for non-qualified expenses prior to your reaching age 65, becoming disabled or dying. Even if you use the funds for non-qualified expenses after you are 65 or disabled, you will only be subject to ordinary income tax on the money you withdraw without the 20% penalty.
No. Employers are under no obligation to make any contributions to their employees’ HSAs. Many employers find that contributing to employees’ HSA accounts may help improve adoption of HDHPs and HSAs, especially if they are transitioning from a more traditional type of health coverage.
Yes. An employer may fully fund the employee’s HSA at the beginning of the year, however HSAs belong to the individual and not the employer and the employer has no further control over the accounts after they have been funded. As a result, many employers elect to fund employee’s HSAs periodically throughout the year.
The tax treatment of employer HSA contributions depends on how the business is incorporated. For sole proprietors, partnerships, and S-corporations, contributions to a partner’s HSA will be treated as a distribution to the partner and included in the partner’s income and may be deductible by the partner but not by the business (see IRS Notice 2005-8 for treatment of HSA contributions in exchange for guaranteed payments of services rendered for partners and two percent shareholder employees of S-corporations). For larger corporations, employer contributions are treated as employer-provided coverage for medical expenses under an accident or health plan.
Yes, IRS Form 8889 is used to report HSA contributions and distributions. You must complete this form each year with your tax return. Please consult a tax professional regarding tax rules.
Yes, over-the-counter (OTC) medications are an eligible expense. An OTC medication is a product with an active drug ingredient. A few of the most common items are pain relief medication, cold and flu products, allergy products, and heartburn medication. You can find a comprehensive list on the HSA Store website.
Most FSAs cover eligible expenses for you and all of your dependents, even if they’re not covered under your primary health plan. For more specific coverage details, please refer to your employer’s Section 125 document.
With a healthcare FSA, your entire annual election amount is available on the first day of the plan year even though you haven’t yet contributed that amount.
You can submit claims for reimbursement at any time during the same plan year that you incur the expense. You may also have a run-out period at the end of the plan year. Check the summary plan document your employer provided.
Yes, over-the-counter medications are an eligible expense. An OTC medication is a product with an active drug ingredient. A few of the most common items are pain relief medication, cold and flu products, allergy products, and heartburn medication. You can find a comprehensive list on the FSA Store website.
Your annual election will be divided by the number of pay periods in your plan year. This amount will be deducted from your paycheck before taxes are assessed.
Most LPFSAs cover eligible expenses for you and all of your dependents, even if they’re not covered under your primary health plan. For more specific coverage details, please refer to your employer’s Section 125 document.
If you have a benefits debit card, simply swipe it at the register. Otherwise, just file a claim online, be sure to include the receipt documenting the patient, provider, date and type of service, and cost. Once approved, your reimbursement will be direct deposited into your bank account.
Elections can only be altered if you experience a change in status as defined by IRS regulations, such as a marriage, divorce, birth, or death in your immediate family.
Your annual election will be divided by the number of pay periods in your plan year. This amount will be deducted from your paycheck before taxes are assessed.
If you have a benefits debit card and your care provider accepts credit cards, you may pay directly from your account. Otherwise, simply pay out-of-pocket and then file a reimbursement claim online with your expense documentation.
The IRS requires appropriate documentation for all Dependent Care FSA reimbursements. When submitting a claim for reimbursement from your Dependent Care FSA, you will need to send one of the following:
Date(s) of service- The paid date may or may not be the same as the date of care; the date of care is required.
Dependent’s name
Description of service(s)
Dollar amount
Provider’s name, address, and tax ID or Social Security number
*You don’t need to include additional documentation if your dependent care provider signs the DCA Claim form.
An itemized statement or invoice from your daycare provider that includes:
Date(s) of service- The paid date may or may not be the same as the date of care; the date of care is required.
Dependent’s name
Description of service(s)
Dollar amount
Provider’s name, address, and tax ID or Social Security number
*Handwritten information, copies of canceled checks or credit card receipts will not suffice. If your daycare invoice or statement does not include all of the required information, you must complete the Dependent Care Claim form and have your provider sign.
Participation in your DCA is also terminated. This means that only expenses that were incurred prior to your termination date are eligible for reimbursement.
