Prepare for 2021 Medical Expenses by Reviewing Your Health Financial Account Options
A Blue Cross-funded health financial account is automatically paired with each medical plan to help offset your costs during the plan year. If you choose a PPO plan, you’ll be paired with a Health Savings Account (HSA). If you choose an HMO plan, you’ll be paired with a Health Reimbursement Arrangement (HRA).
Each account covers different expenses, and some let you contribute tax-free money, while others only allow Blue Cross to contribute, so be sure to know how they work before you enroll in your plan. If you know you’re going to have specific medical expenses, you may also want to consider adding a Flexible Spending Account (FSA).
We recommend reviewing your claims for the last two years, then ask yourself the following questions:
- Did you use all the money from your health financial account last year?
- If you contributed money, was it enough, not enough, or more than enough?
- Do you have money remaining in your 2020 account that you need to spend before the end of the year?
- What are your expected medical expenses for 2021?
- Should you contribute more to your HSA to decrease taxable income?
- Do you have money remaining in your FSA that you can roll over to 2021?
Here are some tools and resources to get answers:
Health Financial Accounts: What are the differences?
Note: This table includes a general overview of health financial accounts. For details on Blue Cross accounts, please refer to each of the medical plan pages.
|Health Savings Account (HSA)
Paired with the Blue Care® Elect Saver – Choice (PPO) Plan
|Health Reimbursement Arrangement (HRA)
Paired with the Network Blue® New England Deductible (HMO) Plan
|Flexible Spending Account (FSA)
For details on the health care, limited purpose and dependent care FSAs, see the medical plan pages
|How does it work?||Pre-tax dollars you contribute from your paycheck automatically go into an HSA that is used to pay out-of-pocket health care costs. Your employer has the option of contributing.||Your employer contributes tax-free funds to help you pay for health expenses.||Pre-tax dollars you contribute from your paycheck automatically go into an FSA that is used to pay out-of-pocket health care costs. If you elect an FSA for 2021, you'll have the option of rolling over up to $550 of your 2020 balance to use in 2021.|
|What can I use it for?||With HSA-eligible expenses, as defined by the IRS (Internal Revenue Service), including deductibles, prescription copays, dental and vision care, and more.||Out-of-pocket medical expenses your employer decides are eligible such as deductibles, and medical and prescription copays.||FSA-eligible expenses, including deductibles, prescriptions, copays, dental and vision care, and more|
|Why should I consider it?||This may be a smart choice whether you want to pay for health care expenses now, or want to save for down the road and into retirement.||You may want to take advantage of tax-free funds to help pay for your health care expenses.||This may be a wise choice if you know you'll have health care expenses this year and want to budget for them.|
|How much can I contribute to my account in 2021?||Up to $3,600 for a single HSA plan and $7,200 for a family plan.||Individual: $400
Individual +1: $800
|Up to $2,750. You'll also have the option of rolling over up to $550 of your 2020 balance to use in 2021 if you elect an FSA.|
|What happens to my account if I leave Blue Cross?||The money is yours to keep and save for future expenses, even into retirement.||Your account is closed. You can file claims up to 90 days after your termination date for services received while you were working at Blue Cross.||Your account is closed. You can file claims up to 90 days after your termination date for services received while you were working at Blue Cross.|
|What are the tax benefits?||Tax-free contributions and withdrawals, tax-deferred growth.||Money contributed by your employer is tax-free to you.||Tax-free contributions.|
|What are other benefits?||Your savings build and earn tax-free interest (interest isn't tax-free for residents of NJ).
After age 65, you can withdraw HSA funds for any use without penalty.
|Your employer helps cover your expenses.||You decide how much money to set aside in your FSA for the year.
Your full FSA balance is available to you at the start of your plan year.
|Do unused funds roll over at the end of a year?||Your unused balance rolls over year to year and can grow tax-free with interest or be invested.||Your unused balance is forfeited and doesn’t roll over to the next year. “Use it or lose it.”||If you elect this account, your unused balance is forfeited and doesn’t rollover to the next year. Exclusive for 2021, if you elected a health care or limited purpose FSA in 2020, you may roll over up to $550 of your remaining balance to use in 2021 as long as you elect a Flexible Spending Account for 2021.|
|Can funds be invested?||Yes||No||No|