Tax Advantage Accounts

You have access to various pre-tax accounts through Bank of America. Tax Advantage Accounts offer you a way to pay for your share of eligible expenses with pre-tax dollars.  Your tax may be less if you pay for expenses with pre-tax dollars instead of after-tax income.   The following accounts are designed to help you pay out-of-pocket health care and dependent care expenses on a pre-tax basis:

  • Health Care Flexible Spending Account (FSA)
  • Dependent Care Flexible Spending Account (FSA)
  • Limited Purpose Health Flexible Spending Account (FSA)
  • Health Savings Account (HSA)
Review the features and benefits of each account to determine which combination is right for your personal situation.
 

Tax Advantage Accounts

Medical Coverage

 Features

HSA

Consumer Choice PPO
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 Contribute through payroll deduction in addition to your employer’s premium rebate contribution. You may also make personal, after-tax contributions and file for an income tax deduction for 2009
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 Maximum 2009 contribution is $3,000/individual and $5,950/family (this includes premium rebates from your employer). Catch-up HSA contribution for individuals age 55 or older is $1,000.
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 Use pre-tax contributions now and/or save and invest for future health care expenses. You will earn interest on your cash account and once you have $1,000 or more in your account, you can invest in mutual funds
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 Your HSA is portable and belongs to you
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 There is no “use it or lose it” rule
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 You can also enroll in a Dependent Care FSA and Limited Purpose FSA
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 For a comprehensive list of eligible expenses visit www.IRS.gov (Publication 502)

Limited Purpose FSA

Consumer Choice PPO
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 Provides pre-tax savings limited to dental and vision expenses such as orthodontia, deductibles, coinsurance, eye examinations, prescription glasses and more. Visit www.IRS.gov to review eligible dental and vision expenses
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 Combines with the Consumer Choice PPO and HSA programs
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 $2,500 plan year maximum
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 “Use it or lose it” rule applies
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 Pre-tax payroll deductions are automatic
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 You can also enroll in a Dependent Care FSA

Health Care FSA

Premium PPO
Standard PPO
Other Coverage
(i.e., HMO coverage or coverage through a spouse.)

•
 For a comprehensive list of eligible expenses visit www.IRS.gov (Publication 502)
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 $5,000 plan year maximum
•
 “Use it or Lose it” rule applies
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 Pre-tax payroll deductions are automatic
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 Not available to HSA participants

Dependent Care FSA

NA
•
 For a comprehensive list of eligible expenses visit www.IRS.gov (Publication 502)
•
 $5,000 plan year maximum
•
 “Use it or Lose it” rule applies
•
 Pre-tax payroll deductions are automatic
 

Important Tax Information

  • If you are reimbursed for an expense from a Tax Advantage Account, you cannot claim that expense as a deduction on your federal income tax return.
  • Some states do not recognize contributions as pre-tax.  If you live in those states, you will be subject to state tax on your contributions, though you will not be subject to federal income tax.
  • Keep all receipts for expenses because substantiation (proof that expense is an eligible expense according to the IRS) is required by our vendor, Bank of America and the IRS.