You can save money by paying for eligible health care and dependent day care expenses with tax-advantaged accounts. Pearson offers you several types of accounts that lower your taxes.
Health Savings Account
With the $1,850 or $2,850 Deductible Plans, you’re eligible to open and contribute money to a Health Savings Account (HSA). The HSA is a tax-free savings account you can use to pay for eligible health expenses anytime, even in retirement. You can contribute to your HSA through before-tax payroll deductions up to IRS annual limits.
In order to open and contribute to an HSA you:
- Must be enrolled in the $1,850 or $2,850 Deductible Plan
- Cannot simultaneously participate in the Health Care FSA (but participation in the Combination 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
It’s important to note that with the HSA:
- All the money in your HSA is yours to keep, year after year
- You can build up savings to pay for future health care expenses. You can 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 for your medical costs in retirement
Combination FSA
Available only to employees who enroll in an HSA
- Designed to work together with your Health Savings Account (HSA) for additional tax-saving opportunities.
- Contribute up to $2,700 in 2020* through before-tax payroll deductions. Note that until you meet the IRS-required medical deductible of $1,400/individual and $2,800/family, only dental and vision expenses are allowed. Once you’ve met the IRS-required medical deductible, eligible medical and prescription drug expenses are allowed. For a list of eligible expenses, refer to IRS Publication 502.
- Choose your contribution amount during open enrollment. You can only change your contribution amount during the year if your personal situation changes.
- Your annual contribution will be divided into equal deductions from each paycheck. Your entire annual contribution amount is available to you from the beginning of the plan year.
- Spend your money by using your debit card, or log in to the website to request a reimbursement.
- Unused money does not carry over at the end of each year — use it or lose it. Be sure to estimate your contribution carefully!
*pending IRS final determination
Health Care FSA
Available to employees who enroll in the $400 or $900 deductible plans, or do not elect medical coverage
- Contribute up to $2,700 in 2020* through before-tax payroll deductions to help cover eligible medical, vision, and dental expenses.
- Choose your contribution amount during open enrollment. You can only change your contribution amount during the year if your personal situation changes.
- Your annual contribution will be divided into equal deductions from each paycheck. Your entire annual contribution amount is available to you from the beginning of the plan year.
- Spend your money by using your FSA debit card, or log in to Pearson Benefits Marketplace to request reimbursement for payments you’ve made. Your entire annual contribution amount is available to you from the beginning of the plan year.
- Unused money does not carry over at the end of each year — use it or lose it. Be sure to estimate your contribution carefully!
*pending IRS final determination
Dependent Day Care FSA
Available to all employees
- Contribute up to $5,000 annually through before-tax payroll deductions to help cover your eligible dependent day care expenses, including child care for children up to age 13 and care for dependent elders.
- Spend your money by using your debit card, or login to Pearson Benefits Marketplace to request reimbursement for payments you’ve made.
- Choose your contribution amount during Open Enrollment. You can only change your contribution amount during the year if your personal situation changes.
- Your annual contribution will be divided into equal deductions from each paycheck. You only have access to money that has actually been deposited into your account.
- Unused money does not carry over at the end of each year — use it or lose it. Be sure to estimate your contribution carefully!
Compare Accounts
| HSA | Combination HSA | Health Care HSA | Dependent Day Care HSA | |
|---|---|---|---|---|
| Available with… |
$1,850 Deductible Plan $2,500 Deductible Plan |
$400 Deductible Plan $900 Deductible Plan (Also available if you waive medical coverage) |
Any medical plan (Also available if you waive medical coverage) |
|
| Receive company contribution | YES | NO | NO | NO |
| Change your contribution amount anytime | YES | NO | NO | NO |
| Access your entire annual contribution amount at the beginning of the plan year | NO | YES | YES | NO |
| Access only funds that have been deposited | YES | NO | NO | YES |
| Use the money for… | All eligible health care expenses | Only dental and vision expenses until you meet the IRS-required deductible ($1,400 single, $2,800 family), then use for all eligible health care expenses. Note: This account is designed to work together with your Health Savings Account (HSA) for additional tax-saving opportunities. | All eligible health care expenses | Eligible dependent day 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 | YES | YES | YES |
| 2020 Annual contribution limits | $3,550 for employee only and $7,100 for family coverage (these limits include your and Pearson’s contributions) | $2,700 | $2,700 | $5,000 |
| Must make new elections annually | YES | YES | YES | YES |
| Money is always yours to keep, and money in your account can be invested | YES | NO | NO | NO |