Category: Life and Health Insurance

Individual Life Insurance

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Life insurance at work is a nice benefit, but it may not be enough to protect your family. If it isn’t enough to cover the mortgage, childcare, medical expenses and ongoing bills, you probably need an individual policy. We can help! Contact the team at Evergreen to get an individual life insurance policy today: https://evergreeninsurance.net/products/life-health/individual-life/

HSA 2022 Compliance Limits

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A clear understanding of the rules up-front helps to avoid problems down the road. This can be especially true when it comes to government programs and the tax implications they represent. For example – Health Savings Accounts (HSA), a popular type of tax-advantaged medical savings account available to individuals enrolled in high deductible health plans (HDHPs).

Individuals can use HSAs to pay for expenses covered under the HDHP until their deductible has been met, or they can use their HSAs to pay for qualified medical expenses that are not covered under the HDHP, such as dental or vision expenses.

HSAs provide a triple tax advantage—contributions, interest and earnings, and amounts distributed for qualified medical expenses are all exempt from federal income tax, Social Security/Medicare tax and most state income taxes. But because of an HSA’s potential tax savings, federal tax law includes strict rules for HSAs, including limits on annual contributions and HDHP cost sharing. These limits, which can vary based on whether an individual has self- only or family coverage under an HDHP, include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,650 to their HSAs for 2022, up from $3,600 for 2021. Eligible individuals with family HDHP coverage will be able to contribute $7,300 to their HSAs for 2022, up from $7,200 for 2021. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs. The minimum deductible amount for HDHPs remains the same for 2022 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of- pocket expense limit increases to $7,050 for self-only coverage and $14,100 for family coverage.

Employers that sponsor HDHPs should review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) for 2022. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.

Contact the professionals at Evergreen Insurance for more information.

Copyright 2022 Evergreen Insurance

Evergreen Insurance provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Health FSAs Feature Carry-Over Option

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Sometimes, leftovers can be more satisfying than when the meal was first served. You somehow appreciate it more, when you can enjoy something that wasn’t used up the first time.

Now, that satisfying carry-over feeling extends to Health Flexible Spending Accounts (FSA).

A Health FSA is an employer-sponsored account that employees can use to pay for or reimburse their qualifying medical expenses on a tax-free basis, up to the amount contributed for the plan year. Typically, Health FSAs are subject to a “use-or-lose” rule that generally requires any unused funds at the end of the plan year (plus any applicable grace period) to be forfeited.

As an exception to this use-or-lose rule, however, employers may allow participants to carry over up to $500 in unused funds into the next year to pay or reimburse medical expenses incurred during the entire plan year to which it is carried over. Also, the carry-over amount does not count toward the Affordable Care Act’s (ACA) limit on employees’ salary reduction contributions to a health FSA.

For this purpose, the remaining unused amount as of the end of the plan year is the amount unused after medical expenses have been reimbursed at the end of the plan’s run-out period for the plan year. For plan years beginning on or after Jan. 1, 2022, the limit on Health FSA carryovers increases from $500 to $570.

The IRS has provided the following rules for Health FSA carryovers:

  • A Health FSA may:
    • Specify a lower amount as the maximum (and has the option of not permitting any carryover at all);
    • Permit carryovers only if it does not also incorporate the grace period rule. The carryover may be used to pay or reimburse medical expenses incurred during the entire plan year to which it is carried over;
    • Limit the ability to carry over unused amounts to a maximum period (for example, a health FSA can limit the ability to carry over unused amounts to one year); and
  • A cafeteria plan is not permitted to allow unused amounts relating to a health FSA to be cashed out or converted to any other taxable or nontaxable benefit.

See how the Health FSA carry-over option can apply to your business and provide an added benefit for your employees. Contact the professionals at Evergreen for more information.

Copyright 2022 Evergreen Insurance

Evergreen Insurance provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.