UC’s 2018 health plan open enrollment window is approaching, which means you have a chance to take advantage of one of the smartest ways to save. It’s the Health Savings Account (HSA) that comes with the UC Health Savings Plan, and it brings you triple tax advantages.1 Here’s how it works—and why it matters.
Through UC's Retiree Health & Welfare benefits, you may have a chance to continue your UC-sponsored medical insurance. But that benefit pays only a portion of your insurance premiums and is only available under certain circumstances.
That’s where the HSA comes in. It’s an additional way to save for health care costs—now and in the future—and gives you substantial tax advantages.
Here are the details.
If you enroll in the UC Health Savings Plan,2 a HealthEquity HSA will automatically be opened for you.
The Health FSA allows you to set aside up to $2,600 in pretax dollars for expected qualified medical, dental, or vision expenses during the year. Contributions are deducted from each paycheck throughout the year; however, the full annual contribution amount is available for use immediately on January 1. At the end of the year, any unused Health FSA funds greater than $500 will be forfeited. For a list of eligible FSA expenses and links to FSA calculators, visit the CONEXIS website at uc.conexisfsa.com. Note that you may not participate in the Health FSA if you are contributing to an HSA.
The Dependent Care FSA allows you to contribute up to $5,000 to pay for qualified dependent care expenses during the year, including childcare coverage, with pretax money. The funds in this account are subject to the IRS use-it-or-lose-it rule and do not roll over year to year.
Take time to project your costs accordingly—once you set the FSA amount during open enrollment, it cannot be changed during the year, except for certain life events. Learn more on ucnet.universityofcalifornia.edu by selecting the Compensation & Benefits tab and following the Other Benefits link.
Open enrollment is your opportunity to review your UC benefits and make sure you have the best coverage for 2018. Take the time to review all your options, then select the ones that support your physical and financial wellness from October 26 to November 21, 2017.
Open enrollment is the time to enroll in the Health FSA and Dependent Care FSA.
Note: If you enroll in the UC Health Savings Plan, you cannot enroll in the Health FSA.
1 With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation.
2 UC Health Savings Plan: By enrolling in the UC Health Savings Plan, a HealthEquity Health Savings Account (HSA) will automatically be opened on your behalf and the UC contribution will be deposited. To participate in the UC Health Savings Plan, you must meet the following requirements:
The University of California intends to continue the benefits described here indefinitely; however, the benefits of all employees, retirees, and plan beneficiaries are subject to change or termination at the time of contract renewal or at any other time by the University or other governing authorities. If you belong to an exclusively represented bargaining unit, some of your benefits may differ from the ones described here.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Fidelity Brokerage Services LLC, member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
© 2017 FMR LLC. All rights reserved.