You can save money on healthcare and dependent care costs through the use of tax-advantaged accounts that allow you to use before-tax dollars to pay for eligible expenses.

 

Overview

WGU offers you the following accounts and encourages you to take full advantage of their money-saving potential. You can enroll in them in Workday as a new hire, during Open Enrollment, or if you have a qualifying life event.

2022 Tax-Advantaged Accounts

Health Savings Account (HSA)

Administered by: HealthEquity

Available only to employees who enroll in High Deductible Health Plan (HDHP). Your current year HSA election will automatically continue into next year unless you cancel or make changes.

Health Care Flexible Spending Account (FSA)

Administered by: HealthEquity

Available to employees without an HSA. Your current FSA election(s) always expire at the end of the calendar year and do not carry over into the next year. You must re-elect FSA participation every year.

Limited Purpose Flexible Spending Account (FSA)

Administered by: HealthEquity

Available to employees who enroll in the High Deductible Health Plan (HDHP) and elect an HSA. Your current FSA election(s) always expire at the end of the calendar year and do not carry over into the next year. You must re-elect FSA participation every year.

Dependent Care Flexible Spending Account (FSA)

Administered by: HealthEquity

Available to all employees with children under the age of 13 or dependents physically or mentally unable to care for themselves. Your current FSA election(s) always expire at the end of the calendar year and do not carry over into the next year. You must re-elect FSA participation every year.

Key Features at a Glance
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Tax-free money

Money goes in tax-free* and comes out tax-free when it’s used for eligible expenses.

Convenient payroll deductions

Contribute to your accounts easily and effortlessly.

Helpful budgeting tool

Plan for upcoming expenses by setting aside money each paycheck.

The HSA Advantage

An HSA allows account owners to pay for current healthcare expenses and save for those in the future. One advantage is that contributions are tax-deductible, or if made through a payroll deduction, they are pretax. Also, the interest earned is tax-free.

Ownership: The money in your HSA is always yours. Unspent balances simply carry over from year-to-year until spent.

Flexibility: You decide when and how much to contribute to your account. In addition, you can choose to use your HSA dollars now or save for future expenses.

Triple Federal Tax Benefits:

  • Contributions are not taxed up to the IRS contribution limit
  • Your money grows tax-free
  • Withdrawals used to pay for qualified healthcare expenses are also tax-free

Portable: Your money stays put even if you change health plans, companies, or you retire. Investment Opportunities: You can increase your HSA balance through several mutual fund investment options provided by HealthEquity.

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Compare the accounts

HSA vs. FSAs

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Access your account
How much could you save?

Here’s an example. Let’s say Tom decides to set aside $2,000 in an HSA or FSA for the year. Normally, on that money, he’d pay $480 in federal income tax, $100 in state income tax, and $153 in payroll tax. So, by contributing that $2,000 to his HSA or FSA, he’ll get $733 in tax savings for the year.

Without an HSA or FSA, Tom would pay … Savings
24% in federal income tax $480
5% in state income tax* $100
7.65% in payroll tax $153
His total tax savings for the year with an HSA or FSA $733

This hypothetical illustration is for educational purposes only. Dollar amounts or savings will vary depending on income, state and city tax rules, and other factors. Please consult a tax, legal, or financial advisor about your own personal situation.

*Contributions are not subject to federal income tax. However, HSA contributions are currently subject to state income tax in CA and NJ. Consult with your tax advisor to understand the potential tax implications of enrolling in an HSA and/or FSA.

 

Health Savings Account (HSA)

A Health Savings Account (HSA) empowers you to build savings for healthcare expenses in a tax-advantaged account. Paired with our qualified High Deductible Health Plan, you and your family can plan, save, and pay for qualified healthcare expenses using an HSA. HSAs are similar to retirement accounts in that contributions to them are never forfeited and any accumulated unused balance carries over year-to-year. HSAs are portable when you move jobs or retire, the balance can be invested in mutual funds, and there are survivor benefits.

To enroll in an HSA Plan, you must meet the following requirements (see IRS Publication 969):

  • Be enrolled in WGU’s High Deductible Health Plan (HDHP)
  • Have no other health insurance coverage except what’s permitted by the IRS
  • Not be enrolled in Medicare
  • Not be claimed as a dependent on someone else’s tax return
Get Unbeatable Advantages with an HSA

The HSA has a triple-tax advantage that can be more effective than a traditional retirement plan. And, WGU will contribute to your HSA, too!

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Put Money in Tax-Free.

You contribute to your HSA through before-tax payroll deductions.

If you need to, you can change your contribution amount anytime.

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Get Company Contributions.

WGU will contribute $1,000 if you have employee-only medical plan coverage, or $2,000 if you cover dependents.

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Pay for Care Tax-Free.*

Pay for eligible medical, dental, and vision expenses you and your family using your HSA debit card (provided sufficient funds are in your account). Track your spending, check your balance, reimburse yourself, and more on the HealthEquity website.

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Grow Money for the Future Tax-Free.

All the money in your HSA is yours to keep, year after year.

You can build up savings through tax-free interest and even invest your money once it reaches a minimum balance, which gives you the potential for tax-free earnings growth and a way to plan ahead.

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2022 Contribution Limits

Federal tax rules set the maximum HSA contribution limit for each year. Keep in mind, the maximum amount you and WGU can contribute to your HSA is determined by annual limits that the IRS sets. In 2022, the total contribution limits are:

  • $3,650 if you have employee-only medical plan coverage, or
  • $7,300 if you cover dependents.

Add $1,000 to these limits if you’re age 55 or older.

Important: The total amount that can be contributed to your HSA for 2022, including any WGU contributions you receive, is summarized in this illustration:

Coverage Level WGU Contributions* Your Contributions (Under age 55) 2022 IRS Limits**
Employee Only $1,750 $1,900 $3,650
Employee + Dependents $2,750 $4,550 $7,300

* Assumes for the entire year: (1) You are in the same coverage level under the WGU HDHP medical option all year, (2) Maximize the per-payroll WGU matching contributions, and (3) Earned the maximum annual HSA contribution under Wellbeing Program.
** Add $1,000 if age 55 or older

Who is Eligible for an HSA?

In order to establish and contribute to an HSA, you:

  • Must be enrolled in the High Deductible Health Plan (HDHP)
  • Cannot simultaneously participate in the Health Care FSA (but participation in a Limited Purpose FSA is allowed).
  • Cannot be enrolled in any other medical coverage, including a spouse’s plan or Medicare.
  • Cannot be claimed as a dependent on someone else’s tax return.

You should review IRS rules for making HSA contributions if you will turn age 65 during the year. For more information, see IRS Publication 969.

Increase your tax savings with a Limited Purpose FSA

Use your HSA together with a Limited Purpose FSA for additional tax savings. With the Limited Purpose FSA, only dental and vision expenses are allowed.

Getting started

To contribute to an HSA, you must enroll in the High Deductible Health Plan (HDHP). You will elect your HSA contribution amount during enrollment. You can then manage your account through the HealthEquity website.

As you start using your account, keep in mind that you can only spend money that has actually been deposited into your account — your entire annual contribution amount is not available to you from the beginning of the plan year. Your HSA balance will grow as deposits are made from each paycheck.

IMPORTANT

HSAs are individually owned and controlled by you. Accordingly, it is your responsibility to ensure you do not contribute more than the allowable maximum.

 

Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSAs) help you make your money go further. You can set aside before-tax dollars through convenient payroll deductions to pay for eligible healthcare and dependent care expenses. Note: You must enroll in these accounts each Open Enrollment if you want to contribute the next year, even if you already participate. Any unused healthcare FSA amounts up to $570 will carry over to the next year, but any funds above this amount are forfeited if you do not incur expenses on or before December 31 and submit those expenses for reimbursement by March 31. Our FSAs are administered by HealthEquity. Your FSA options are as follows:

Healthcare FSA Limited Purpose FSA Dependent Care FSA
Who is eligible? Anyone without an HSA can participate in the full Healthcare FSA. Employees who enroll in the HDHP medical plan and elect an HSA. Employees with children under the age of 13 or dependents physically or mentally unable to care for themselves.
How does it work? You can use these funds to pay for eligible medical expenses like deductibles, copays, and coinsurance for you and your eligible dependents.

You can deposit up to $2,750 in 2021 to pay for eligible medical, dental, and vision expenses. The entire amount you elect is available at the beginning of the plan year or your initial eligibility date, whichever is later.

Expenses must be incurred by December 31. You have until March 31 to submit eligible expenses for reimbursement.
If you enroll in the HDHP medical plan and elect to enroll in an HSA, you are eligible for a Limited Purpose FSA. This FSA can be used to pay for eligible dental and vision expenses for you and your eligible dependents. Medical expenses are reimbursed solely through your HSA.

You can deposit up to $2,750 in 2021 for eligible dental and vision expenses. The entire amount you elect is available at the beginning of the plan year or your initial eligibility date, whichever is later.

Expenses must be incurred by December 31. You have until March 31 to submit eligible expenses for reimbursement.
You can use these funds to pay for eligible day care expenses for eligible dependents including, but not limited to, payments to qualified day care centers, preschool costs (up to, but not including kindergarten), after school care, and elder care. This account cannot be used for dependents’ medical expenses.

You can deposit up to $5,000 in 2021 into the Dependent Care FSA ($2,500 if you are married and you and your spouse file individual income tax returns). The balance in the account will accumulate with payroll deductions and you will have access to your YTD contributions at the time of reimbursement. Expenses must be incurred by December 31.

You have until March 31 to submit eligible expenses.

Please note that you must choose between a Dependent Care FSA and the Child Care Tax Credit; you cannot use both.
What types of expenses are eligible Medical, Dental, Vision Dental, Vision Day care for eligible dependents

Find a complete list of eligible expenses from the IRS at irs.gov or 800-829-3676. (Search or ask for Publication 502 for healthcare expenses, Publication 503 for dependent care expenses.)

Use your Money!

With FSA money, you “use it or lose it.” If you have a balance left in your FSA as year-end approaches, try to spend as much of it as you can on eligible expenses. Request reimbursement or manage your account on the HealthEquity website.

Carry Over Your FSA Money!

You can carry over up to $570 of the unused balance in your Healthcare FSA, Limited Purpose FSA, and/or Dependent Care FSA from 2022 to 2022. You can still elect to contribute up to the maximum annual amount for 2022 during Open Enrollment. Request reimbursement or manage your account on the HealthEquity website.

Health Care FSA

A Health Care FSA is available to employees who enroll in the Traditional Low Deductible Health Plan (LDHP) or do not elect medical coverage. You can contribute up to $2,850 for the year through before-tax payroll deductions to help cover eligible medical, dental, and vision expenses.

How the Health Care FSA works
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Choose

Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.

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Contribute

Your annual contribution will be divided into equal payroll deductions, but the entire amount is available to you from the beginning of the plan year.

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Spend

Spend your money by using your FSA debit card, or log in to the HealthEquity website to request reimbursement for payments you’ve made.

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Use It Up

Any unused healthcare FSA amounts up to $570 will carry over to the next year, but any funds above this amount are forfeited if you do not incur expenses on or before December 31 and submit those expenses for reimbursement by March 31.

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Limited Purpose FSA

A Limited Purpose FSA is available only to employees in the HDHP to offer additional tax-saving opportunities. You can contribute up to $2,850 for the year through before-tax payroll deductions. This account can be used for eligible dental and vision expenses only.

How the Limited Purpose FSA works
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Choose

Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.

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Contribute

Your annual contribution will be divided into equal payroll deductions, but the entire amount is available to you from the beginning of the plan year.

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Spend

Spend your money by using your FSA debit card, or log in to the HealthEquity website to request reimbursement for payments you’ve made.

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Use It Up

Any unused healthcare FSA amounts up to $570 will carry over to the next year, but any funds above this amount are forfeited if you do not incur expenses on or before December 31 and submit those expenses for reimbursement by March 31.

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Dependent Care FSA

A Dependent Care FSA is available to all employees. You can contribute up to $5,000 for the year through before-tax payroll deductions to help cover your eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders.

How the Dependent Care FSA works
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Choose

Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.

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Contribute

Your annual contribution will be divided into equal deductions from each paycheck. You can only use money that has been deposited into your account.

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Spend

Log in to the HealthEquity website to request reimbursement for payments you’ve made.

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Use It Up

Expenses must be incurred by December 31. You have until March 31 to submit eligible expenses.

Please note that you must choose between a Dependent Care FSA and the Child Care Tax Credit; you cannot use both.

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Compare Accounts

  HSA Limited Purpose FSA Healthcare FSA Dependent Care FSA
Available with … High Deductible Health Plan (HDHP) High Deductible Health Plan (HDHP) Traditional Low Deductible Health Plan (LDHP)
(Also available if you waive medical coverage)
Your employment at WGU
Receive company contribution Yes No No No
Change your contribution amount anytime Yes No No No
Access your entire annual contribution amount as needed No Yes Yes No
Access only funds that have been deposited Yes No No Yes
Use account money for… All eligible health care expenses including Medical, Dental, and Vision Only Dental and Vision expenses All eligible health care expenses including Medical, Dental, and Vision Eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders
“Use it or lose it” at year-end No Any unused healthcare FSA amounts up to $570 will carry over to the next year, but any funds above this amount are forfeited if you do not incur expenses on or before December 31 and submit those expenses for reimbursement by March 31. Any unused healthcare FSA amounts up to $570 will carry over to the next year, but any funds above this amount are forfeited if you do not incur expenses on or before December 31 and submit those expenses for reimbursement by March 31. Expenses must be incurred by December 31. You have until March 31 to submit eligible expenses.
Unused money is always yours to keep Yes No No No