Before you get too excited, be sure that you are eligible to make contributions to an HSA. Since this involves tax-savings, the IRS has some requirements:
- You are enrolled in a qualified HDHP
- You're not covered by any other non-HSA-compatible health plan, like Medicare Parts A and B
- You're not covered by TRICARE
- No one (other than your spouse) claims you as a dependent on their tax return
Preventive care is covered 100% in HDHP plans without a deductible or co-payment, so it's possible for healthy people to keep a balance in their HSA account from year to year and allow the funds to grow.
Employees who contribute to an HSA are eligible to make additional contributions to a Limited Expense Flexible Spending Account or LEX-FSA. The annual FSA limit for 2025 health care and LEX FSAs will be $3,300. This pre-tax benefit account helps you save on eligible out-of-pocket dental and vision care expenses while taking advantage of the long-term savings power of an HSA. Plus, if you re-enroll in FSAFEDS during Open Season, you can carry over up to $660.00 remaining in your account from one plan year to the next, so there's no "use or lose" risk.
Here are some of the HDHP plans to choose from for the 2025 FEHB/PSHB plan year:
- GEHA Benefit Plan High Deductible Health Plan
- Self Only in-network deductible of $1,650 with HSA contributions of $1,000); out-of-pocket maximum of $6,000 for in-network
- Self Plus One or Self Plus Family in-network deductible of $3,000 with HSA contributions of $2,000; out-of-pocket maximum of $12,000 for in-network
- FEHB Enrollment Code 341 Self Only $76.27 biweekly or $165.26 monthly
- FEHB Enrollment Code 343 Self Plus One $163.99 biweekly or $355.31 monthly
- FEHB Enrollment Code 342 Self Plus Family $201.52 biweekly or $436.63 monthly
- PSHB Enrollment Code 39A Self Only $78.60 biweekly or $170.29 monthly
- PSHB Enrollment Code 39C Self Plus One $168.98 biweekly or $366.13 monthly
- PSHB Enrollment Code 39B Self Plus Family $07.66 biweekly or $449.92 monthly
- Aetna HealthFund HDHP w/HSA
- Self Only in-network deductible of $1,800 with HSA contributions of $800)
- Self Plus One or Self Plus Family in-network deductible of $3,600 with HSA contributions of $1,600.
- FEHB Enrollment Code 224 Self Only $135.20 biweekly or $292.93 monthly
- FEHB Enrollment Code 226 Self Plus One $287.01 biweekly or $621.86 monthly
- FEHB Enrollment Code 225 Self Plus Family $241.49 biweekly or $523.23 monthly
- PSHB Enrollment Code G3D Self Only $174.38 biweekly or $377.83 monthly
- PSHB Enrollment Code G3F Self Plus One $377.42 biweekly or $817.84 monthly
- PSHB Enrollment Code G3E Self Plus Family $342.76 biweekly or $742.65 monthly
- MHBP Consumer Option HDHP w/HSA
- Self Only in-network deductible of $2,000 with HSA contributions of $1,200)
- Self Plus One or Self Plus Family in-network deductible of $4,000 with HSA contributions of $2,400.
- FEHB Enrollment Code 481 Self Only $84.20 biweekly or $182.43 monthly
- FEHB Enrollment Code 483 Self Plus One $186.33 biweekly or $403.72 monthly
- FEHB Enrollment Code 482 Self Plus Family $195.65 biweekly or $423.90 monthly
- PSHB Enrollment Code 74A Self Only $94.93 biweekly or $204.60 monthly
- PSHB Enrollment Code 74C Self Plus One $217.49 biweekly or $471.23 monthly
- PSHB Enrollment Code 74B Self Plus Family $219.42 biweekly or $475.40 monthly
There are other regional HDHP plans that you can locate using OPM's Plan Information tool (click on your state for a menu of all the available HDHP plans).
Flexible Spending Account Program and www.fsafeds.gov
Benefits of Contributing to an FSA
- Tax Savings: Contributions to FSAs are deducted from gross income, which lowers taxable income and can lead to significant tax savings.
- Predictable Healthcare and Dependent Care Budgets: FSAs provide employees with a pre-set amount to use on eligible expenses, helping families budget more effectively for out-of-pocket costs.
- Yearly Rollover and Grace Periods allowing a portion of unused funds to carry over to the next plan year, or a grace period, which extends the time to use funds.
Under the FSAFEDS program, employees have a great opportunity to lower their taxable income by thousands of dollars each year by participating in three types of FSA benefits:
- Health care (HCFSA)
- Dependent care (DCFSA)
- Limited Expense (LEXFSA)
An employee who chooses to participate in a HCFSA or LEXFSA can contribute up to $3,300 through payroll deductions during the 2025 plan year. A DCFSA has a limit of $5,000 per household. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. If the employee's spouse has a plan through their employer, the spouse can also contribute up to $3,300 to that plan. In this situation, the couple could jointly contribute up to $6,600 for their household. The maximum carryover amount to 2025 is $660, increasing from $640 in tax year 2024. The carryover doesn't affect the maximum amount of salary reduction contributions that can be made. This is a way to take the money that you already spend on out-of-pocket healthcare and dependent care and turn it into a tax break! You must reelect your FSA allotment every year, this does not carry over from last year's election!
DCFSA or Dependent Care Tax Credit?
You may apply up to $3,000 of expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals to your taxes through the Dependent Care Tax Credit. If you have two or more dependents and your household adjusted gross income is less than $43,000, you might find the federal tax credit to be more beneficial. However, if your household adjusted gross income exceeds $43,000, it is likely the DCFSA will provide greater tax savings. Learn more at the FAQ section of www.fsafeds.gov. Some federal agencies do not participate in FSAFEDS, but may offer their own FSA program and they include:
- District of Columbia Government
- Farm Credit Administration
- Farm Credit System Insurance Corporation
- National Science Foundation
- Office of the Comptroller of the Currency
- The Supreme Court of the United States
- United States Institute of Peace
- United States Postal Service
- Postal Regulatory Commission
Dependent care FSA accounts can be used for your dependent who is under age 13 to pay for before and after school care; babysitting and nanny expenses; daycare, nursery school, and preschool; and summer day camp. You may also allocate funds to pay for care for your spouse or a relative who is physically or mentally incapable of self-care and lives in your home. Use the FSAFEDS tool to calculate your tax savings. You can contribute up to a maximum of $2,500.00 per year if you are married and file a separate tax return and $5,000.00 per year if you are married and file a joint tax return or if you file as single or head of household. For a Dependent Care FSA, the benefit period is January 1 of the current year through March 15 of the following year. It's longer because DCFSA has a grace period. You have until midnight EST on April 30 following the end of the benefit period to file claims for eligible expenses incurred during the previous benefit period or grace period.
Federal Employees Dental and Vision Insurance Program and www.benefeds.gov
FEDVIP offers eligible participants a range of plans from 12 dental and five vision carriers. This gives you a choice and the flexibility to select the right coverage for you and your family.
- FEDVIP dental plans provide comprehensive dental coverage, including preventive services covered at 100% when you use an in-network provider. There are no deductibles when using in-network dentists. Also, there is no waiting period for major services such as crowns, bridges, dentures, orthodontia, and implants.
- FEDVIP vision plans provide comprehensive vision coverage, including routine eye exams and vision correction without a referral. Plans also include low vision exams, eyeglass frames and lenses, and contact lenses at many optometrist offices or optical retail stores. Also, there are lens options such as shatter-resistant polycarbonate, scratch-resistance solutions, anti-reflective solutions, UV coatings, tinted and progressive lenses, and discounts on laser eye surgery.
Refer to individual plan brochures for the official statement of benefits.
BENEFEDS is the online benefit management portal where you can enroll in and manage your FEDVIP dental and vision plans and pay your Federal Long Term Care Insurance Program bills online and view your FLTCIP payment/FSAFEDS allotment histories. In addition, all employees and annuitants may determine if a supplemental dental or vision plan is needed for the 2025 plan year under FEDVIP program (your current coverage will continue if you do nothing).
What are you doing Saturday morning? Maybe it's time to act before it's too late!
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