FDX - Health Care Savings Account
 

I know there is another forum that addresses "money" issues, but this one is for guys that work at Fedex.

I am doing my taxes this year (last time, next time it goes to accountant). Has anyone had any experience when dealing with HCSA? Is this already deducted from our taxable income?? I am using turbo tax and it mentions a 1099-SA form (which I haven't received, and am not sure if/when I will). There is an amount in block 14 (other) that has HCSA and the amount. Anyone else do their own taxes? Any help how to work this would be greatly appreciated...

On another subject, I used Pro-diem on advice from APC'ers. It cost me 50 bucks and I got a 5K deduction. I do fly about half my trips overseas, not sure about domestic only. Thanks for that tip guys!

If you look at your W-2 I think you will find that the HCSA has already been reported as non taxable income. But consult an accountant for good advice.

Don't forget to add that $50 into the cost of preparing your taxes.

Whatever amount you put into the hcsa, it lowers your "taxable" income (like the 401).

On a slightly seperate note, DON'T USE AN HSA!!! OMG, that is the worst scam you will find. You are better off setting up a high interest savings account and making direct deposits into it. Here's why:

When you put money into the HSA you don't pay taxes, but you don't earn interest (in most cases) either. That means your money is just dead in the water. Now, when you contribute to an HSA you lock that money into one use and one use only. It can not be rolled over into any other type of account.

If you just create a high interest savings account and make deposits into that account the same way you would into an HSA, you'll have access to your money for any reason, you'll be making money and if you do use the money for medical expenses it is tax deductible. You will get the taxes back at the end of the year, which you can put back into your savings account and have the security you get with an HSA with the flexibility of having a normal savings account.

This is what I do and I haven't touched my savings account for years and I'm making 5.75% interest. I don't think that rate is available now, though. I found several at 4.25%. When I get laid off again (because this is aviation and we all get laid off several times in our career) my version of the HSA is available for use to pay bills with out penalty.

But, that is just my opinion.

Nothing wrong with opinions. I use my HCSA but always undershoot how much I think I'll need. I am lucky enough to by braces for the 7th grader this year. That $2K co pay will come out of the hcsa; saving me roughly $400 in taxes. That would take plenty of money and time to make up at 4.25%.

You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (Form 1040, line 38). A HCSA reduces your taxable income by the amount you decide to fund it, and you do not have to fund it entirely at the outset of the year (you can make 12 monthly payments totaling the amount you specify for the HCSA for the tax year).

A HCSA and taxable interest bearing savings account do not compare apples to apples.

I think it can be a good deal if you don't overestimate your medical needs. Whatever you don't spend is lost, and that certainly makes up for any tax advantages.

Wildcat, I am not sure how your HSA is implemented, but at FDX we split our payments by 12. For example, if you decide you want a $3,000 HSA, they send you a debit card that has $3,000 available to spend on medical needs. You pay $250/month. In FDXLAG's case, he could spend 3k on braces in January, yet pay off the balance interest free. I am not sure how you would earn any real amount interest on this money, and the tax advantages would most likely outweigh any interest earned. I think the key point is don't overestimate your needs. It becomes a very bad deal then....

wildcat, great idea for someone who has not touched that money in years. Sounds like you have created a savings account for emergency purposes. If you don't need the money for medical expenses - there is no reason to create an HCSA.

With the HCSA you have the full amount (which you determine each year) available on Jan 1st but, the payments are spread out over the entire year. Great if you have some big expenses planned early in the year. Also, medical expenses are only tax deductible once you reach a certain threshold (I think it something like 7% of your adjusted gross income). The money put into the HCSA is pretax and reduces your taxable income. The only downside to the HCSA is if you don't spend all you put into it for a year, it disappears :eek:

To each his own - but for many the HCSA actually saves more in taxes than they would ever earn in interest (unless you can find somewhere that is paying above 15% :D )

The rest of you type too fast :D:D:D

A scam?

Well, my opinion is:

An HCSA is a no brainer. NO taxes trumps a high interest savings account probably about 100% of the time. Just go over your previous year's expenses to come up with a fairly accurate estimate, for your yearly contribution.

Sure, you can just deduct medical expenses on your tax return. That is, anything exceeding 7.5% of your AGI. If you've reached that point, you've most likely gone over the $5650/family HSA limit, anyway.($3000 @ FDX)

Of course, if you're single with no kids, and never go to a doctor, dentist, chiropractor, or need glasses, aspirin, bandaids or cough syrup...You might not be able to take advantage of it. But, if your anyone else, it's the opposite of a scam.

And, for our senior(age) pilots...It can be used for wheelchairs, hearing aids, support hose and learning disabilities. The last of which, may come in handy for that glass cockpit transition.

And say you overshoot on the money put in the account. Go to the optometrist get a pair or two of sunglasses.

Not positive but thought you could file to get any extra money back.

I "think" any unspent money is lost. If anyone knows otherwise, please advise. Thanks ...

You lose it, if you don't spend it.

It's a Health Care Flexible Spending Account.

The FSA part of it, makes it "use it, or lose it", it seems.

For FDX...There's a "spend it by" date, on the Wageworks.com website, under "Health Care".

"Hey!!" My "posts" are "starting" to look like "O"s.

Use it or loose it... My optometrist says he is always booked toward the endof the year. I always undershoot now on what I put in there. BUT those that have extra. See the eye guy, done it a few times.

If you undershoot in a given year, make a trip to the pharmacy and stock up on anything that you might use for the next year. Cold medicine, aspirin, ibuprofen, band aids, etc...... Then plan better next year. I have almost always used every penny. I had HC Flex spending at a previous employer. It was nice to see it in the new contract here.

Had extra money this past November in the account. Made a trip to Walgreen's and spent approx $100. If you have the time, a look on their website will list items that can be purchased that fall within the Health Care Spending Account. At Walgreen's, they call it a Flexible Spending Account -- FSA -- which is also posted on the yellow/white tag in front of the items on the shelf. Also, the receipt will display an "F" next to the items.

FWIW, I think we are limited to the types of stores to use it for purchases for non-precription items. I think we received a description in literature that we could only use it at a Wal-Green's/Rite-Aid type store versus a grocery store to purchase the same items.

I'll have to look, but I am pretty sure you can file the paperwork and get the overage back. You just end up paying taxes on it.

Or get a Foxhunter type elective surgery, I mean, injury!!

I stand corrected on the Flexible Spending Arrangement. See below or the link:

http://www.irs.gov/publications/p969/ar02.html#d0e1691

Balance in an FSA

Flexible spending accounts are “use-it-or-lose-it” plans. This means that amounts in the account at the end of the plan year cannot be carried over to the next year. However, the plan can provide for a grace period of up to 2½ months after the end of the plan year. If there is a grace period, any qualified medical expenses incurred in that period can be paid from any amounts left in the account at the end of the previous year. Your employer is not permitted to refund any part of the balance to you.

Let me guess? You are a healthy 25 year old RJ f/o without any dependents? In your case, there may be better investments that an HSA. For those of us with families, who pay some serious taxes, this is in fact a great tax savings vehicle.

But thanks for your input anyway ...

There is a HUGE difference between and FSA, MSA, and HSA. It seemed like we were mixing terms a bit there in this thread. The HSA is great if it fits your situation. If your healthy it's like another IRA.

I think you might be the one mixing things up. At FedEx, hence the "FDX - Health Care Savings Account" title of this thread, the HCSA is like a FSA and is a use-it-or-lose-it type account. You determine each year how much you want in it. If you are healthy and don't spend the money it becomes the worst IRA out there. :eek:

That was pretty funny... :D

you mean a boob-job could be tax free? :D

From the Fedex Health Care Enrollment Guide:

"The Health Care Spending Account (HCSA) allows you to set aside money from your paycheck on a pretax basis (that reduces your taxable income) to pay for eligible health care expenses incurred by you and/or your eligible family members. It is a cost-effective way to pay for such items as medical and dental deductibles, copayments and eligible health-related expenses that are not covered by your health plan options."

"The HCSA is beneficial for anyone who has eligible out-of-pocket medical, prescription drug, mental health/substance abuse, dental or vision expenses beyond what their health plan options cover."

“USE IT OR LOSE IT” RULE
"Under this rule, you must use the money in your HCSA for eligible expenses you incur during the calendar year in which the contributions are made."

Pretty straight forward. It's a good deal for most guys at Fedex, as long as you don't over-estimate how much to put into the account. Whatever amount you designate to put into the account during the enrollment period, say $1200 as an example, then 1/12 of that amount is subtracted from your paycheck each month - $100/mo. for our example.
You can spend all $1200 (or whatever amount you designate) on Jan. 1st, and still just have to pay the $100 per month for the rest of the year.

The guide also lists what are allowable and non-allowable expenses. If you have questions, you can look at the guide at www.fedex.ehr.com.

You are right. Here at FedEx we have our Health Care Savings Account or HCSA which is actually a Flexible Spending Account or FSA rather than a Health Savings Account or HSA. The big difference being FSAs are use or lose while the HSAs are yours forever and earn interest.

Clear as mud, right?

Nope....older than I'd like to admit, married with 2 kids.

Yes, you can deduct all of your medical expenses. However, you get more money back if you don't have 7.5% of your income in deductions. If you use an HSA, you don't get to use the 7.5% standard deduction. So if your HSA doesn't exceed 7.5% of your income, you are throwing money away.

PLEASE send me the name and address of your CPA!! How are you deducting all of your medical expenses? Inquiring minds want to know!

Wildcat,

You should seek some professional financial advice.

You're sounding more and more like the typical "got it all figured out" pilot. You know, the type that keeps investing, until it's all gone.

Wildcat

Get out your HP12C and run the numbers. 12 months, 100/month at 6%. At the end of the year you've deposited $1200 and the account is worth $1233.56

Conversely, putting that $1200 in the HCSA at an effective tax rate of 20% reduces the tax burden by $240.

What everyone is trying to point out is that if we at FDX don't put more into the account than we spend, it is a huge benefit to use the HCSA.

The minimum we can put in is $250. Using the above numbers, I could earn $7 in interest or save $50 in taxes. I would hazard that we all could spend close to $20 a month at Rite-Aid or in co-pays.

There is no standard 7.5% deduction. You can't start deducting medical expenses until they exceed 7.5% of your adjusted gross income (line 38 of your 1040). You need to look at schedule A just a bit closer.

The way you potentially save money or make money with an HSA is the fact that it is combined with a medical insurance program that has an extremely high deductible before it kicks in. That high deductible plus the fact that you are paying for medical procedures (including routine items) up to the amount of your deductible lowers your monthly insurance cost significantly(more than you will save on your taxes with an FSA). The upside to an HSA is that it earns interest in a tax free environment and any money left over at the end of the year rolls over. Also good is that HSA money is your money forever and grows tax free. On the bad side, initially anyone using a HSA will be walking a tightrope until your account builds up over time. Those typically in good health, who make infrequent visits to the doctor are good candidates for HSAs.

...but then who cares, this isn't an option through FedEx right now anyway. So back to contract 2010 and when I can expect to get out of the SO seat without bidding an FDA.

Nice one wildcat, I'm gonna print out your post and throw it in my tax file. Check it out with some pro's later, Thanks. Not.

WageWorks Visa Card
 

I talked to my local Costco Pharmacy and they now accept the WageWorks Visa card ( Health savings card).

I'm in my second year using the WageWorks card with no problems.