Tax-Advantaged Accounts

You can save money on health care and dependent care expenses by paying for them with tax-advantaged accounts.

Account Options

• Health Savings Account (HSA): Available only to employees who enroll in the CDHP medical plan
• Flexible Spending Accounts (FSAs):
  • Health Care FSA: Available to employees who do not enroll in an HSA with the CDHP medical plan
  • Limited Purpose FSA: Available to employees who are enrolled in the CDHP plan and have opened an HSA
  • Dependent Care FSA: Available to all employees

*Please note: When the CARES Act was signed into law, over-the-counter drugs and medicines became eligible expenses for your HSA and FSA funds without a prescription. You can now purchase pain relief, cold and flu, allergy, and heartburn medications and menstrual products, such as pads or tampons, with your HSA or FSA.

For more details and to enroll, visit Workday. Note: You must re-enroll in these accounts each year if you wish to participate; your elections do not carry over from one year to the next.

If you enroll in the CHDP medical plan, you’re eligible to open and contribute money to a Health Savings Account (HSA) through HealthEquity. The HSA is a tax-free savings account you can use to pay for eligible health expenses anytime, even in retirement.

HSA Features

* Note: The minimum annual HSA election for 2023 is $120 (or $260 in 2024).

**Money in an HSA can be withdrawn tax-free as long as it is used to pay for qualified health-related expenses. If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn, plus a 20% penalty tax if you withdraw the money before age 65.

Contribution Limits

The limits on total contributions to your account are: 

• Up to $3,850 for employee-only coverage in 2023 (or $4,150 in 2024)
• Up to $7,750 for family coverage in 2023 (or $8,300 in 2024)

If you are age 55 or older, you can contribute an additional $1,000 each year.

Eligibility

To enroll in and contribute to an HSA, you must meet the following requirements.

• You are covered under a Consumer Directed Health Plan (CDHP), on the first day of the month.
• You have no other health coverage except what is permitted.
• You aren’t enrolled in Medicare.
• You can’t be claimed as a dependent on someone else’s tax return.

If you meet these requirements, you are eligible for an HSA even if your spouse has non-CDHP family coverage, provided you are not covered by your spouse’s medical benefits.

The Last Month Rule

Under the last-month rule, you are considered eligible to contribute to an HSA for the entire year if you meet the individual eligibility requirements on the first day of the last month of your tax year (December 1 for most taxpayers). You are treated as having the same CDHP coverage for the entire year as you had on the first day of the last month, if you didn’t otherwise have coverage.

Tax Implications

HSA contributions are made on a pre-tax basis federally and in all states, excluding California and New Jersey. If you live in California or New Jersey, your HSA contributions will be subject to state taxes. No matter what state you live in, your HSA contributions will not be subject to federal taxes.

Using Flexible Spending Accounts (FSAs) lets you save on your eligible health care and dependent day care expenses. The money you set aside in an FSA comes out of your paycheck before Social Security (FICA), federal, and state income taxes are calculated, reducing your taxable income. Typically, this results in a tax savings of 15%–30%, or more!

Health Care FSA

Available to employees who do not enroll in an HSA through the CDHP medical plan or do not elect medical coverage through Sonos.

Choose your contribution amount carefully during Open Enrollment.

• Contribute $120 to $3,050 in 2023 ($260 to $3,200* in 2024) annually of your pre-tax salary to help pay for eligible expenses not covered by your health care plans.
• FSA elections are made for the entire year and cannot be changed unless you experience a qualifying life event.
• Spend your money by using your FSA debit card, or request reimbursement for payments you’ve made.
• Your entire annual contribution is available to you from the beginning of the plan year.
• At the end of 2023, up to $610 in unused FSA funds may be rolled over into 2024, as long as you actively enroll in the FSA. If you don't enroll, you will forfeit your rollover balance, so remember to choose carefully.
• If you enroll in an FSA for 2024, you’ll be able to use funds for expenses incurred January 1, 2024, through March 15, 2025.

* This is the projected amount for 2024; the most up-to-date maximum approved by the IRS will be reflected in Workday.

Only use your FSA debit card for eligible expenses.

• The Health Care FSA covers expenses such as deductibles, copays, and your coinsurance for your medical, dental, and vision plans. It may also cover some expenses not covered by any of your plans, such as LASIK and medical supplies like bandages.
• See a list of eligible medical and dental health care expenses.
• See a list of eligible child and dependent care expenses.
• Always keep an itemized receipt of your transactions, in the event you are requested to substantiate a charge.
• If you submit a claim that includes ineligible expenses, your claim will be denied and you will have to go through an appeal process to be reimbursed for your eligible expenses.
• If you utilize your benefits card for a transaction that may be deemed ineligible, you will be requested to provide documentation of the services to prove eligibility.
• Go to WEX to learn more about covered expenses and rules for participating.

Paying for your eligible claims with your debit card.

• After enrolling in a Health Care FSA, WEX will send you an FSA welcome kit that includes an FSA debit card.
• Use the card to pay for all your eligible health care expenses, and the money will be deducted from your account automatically.

Getting reimbursed for your eligible claims.

• You can choose to pay for services out of pocket and submit claims on the WEX website to be reimbursed via either check or direct deposit into your bank account in as little as two business days from the time you submit your request.
• To sign up for direct deposit, log in to your WEX participant account and go to My Accounts > Reimbursement Settings, change your reimbursement method to direct deposit, and then add your bank account information.

Limited Purpose FSA

Available only to employees who enroll in an HSA with the CDHP plan.

• Contribute up to $3,050 in 2023 ($3,200* in 2024) — to help cover eligible dental, vision, and post-deductible medical expenses.
• FSA elections are made for the entire year and cannot be changed unless you experience a qualifying life event.
• Spend your money by using your FSA debit card, or request reimbursement for payments you’ve made.
• Your entire annual contribution is available to you from the beginning of the plan year.
• At the end of 2023, up to $610 in unused FSA funds may be rolled over into 2024, as long as you actively enroll in the FSA. If you don't enroll, you will forfeit your rollover balance, so remember to choose carefully.
• If you enroll in an FSA for 2024, you’ll be able to use funds for expenses incurred January 1, 2024, through March 15, 2025.

* This is the projected amount for 2024; the most up-to-date maximum approved by the IRS will be reflected in Workday.

Dependent Care FSA

Available to all employees.

• Each year you may set aside $120 to $5,000 ($260 to $5,000 in 2024) (or $2,500 for married couples filing separately) of your pre-tax salary to help pay for your eligible dependent care expenses, for services in or out of your home provided by a licensed day care center, nursery school, or other licensed day care provider for dependent children up to their 13^th birthday and/or elder care for any elder tax dependents you may have.
• Choose your contribution amount during Open Enrollment. You can only change your contribution amount during the year if your personal situation changes.
• Log in to WEX to request reimbursement for payments you’ve made. You can only receive what’s available in your account at the time you submit a claim.
• Unused money does not carry over at the end of each year — use it or lose it.