Navigate Benefit Information by Year:
There are several types of accounts that help to reduce your taxable income when paying for eligible expenses for yourself, your spouse, and eligible tax dependents. The Health Savings Account (HSA) and Flexible Spending Accounts (FSAs) help you save money on out-of-pocket expenses that you and your family incur during the calendar year.
NOTE: You may only participate in the HSA bank account if you meet the IRS requirements and are enrolled in Liberty’s HSA qualified Cigna HDHP plan.
Flexible Spending Accounts (FSA)
The Flexible Spending Accounts are an easy way for you to keep more of your take-home pay by using “pre-tax” dollars for eligible expenses. Simply present your FSA debit card for the purchase of eligible services and goods. Using the debit card allows you to directly tap into your Healthcare and Dependent Daycare FSA, meaning better cash flow for you and no waiting period for reimbursement. Both FSA accounts require non-discrimination testing.Eligible Expenses* and Guidelines
| Healthcare Flexible Spending Account | Dependent Care Flexible Spending Account |
|---|---|
| $3,400 annual maximum | $7,500 annual maximum |
| Medical plan office visit copays, deductibles, and coinsurance | Used for dependent day care expenses while you and your spouse work, look for work, or attend school full-time |
| Certain over the counter items prescribed by your provider | Eligible dependents include children under age 13 or dependents that are physically or mentally unable to care for themselves for 8 hours a day |
| Dental plan copays, deductibles, and coinsurance | Can only be reimbursed up to what you have contributed via payroll deduction (pay as you go) |
| Orthodontia expenses | Expenses must be incurred by March 15th of the following year and submitted for reimbursement by March 31st of the following year |
| Vision care expenses including contracts, glasses, and LASIK surgery | |
| Expenses can be for you or anyone you claim as a dependent on your Federal tax return** | |
| Your entire election is available immediately regardless of actual payroll deduction amounts | |
| Carry over up to $680 for the following calendar year | |
| Expenses must be incurred by December 31st and submitted for reimbursement by March 31st of the following year |
*This is only an example of eligible expenses.
**Visit irs.gov for definition of eligible tax dependent as well as a view a full list of eligible expenses under Section 125.
Limited Purpose Flexible Spending Account (LPFSA)
A Limited Purpose Flexible Spending Account (LPFSA) is a tax-advantaged account used to pay for dental and vision expenses, designed for individuals enrolled in a high-deductible health plan (HDHP) who also have a Health Savings Account (HSA).
An LPFSA allows employees to contribute pre-tax dollars to cover out-of-pocket dental and vision costs, helping reduce taxable income and increase savings. Unlike a general-purpose FSA, an LPFSA is restricted to specific categories to maintain HSA eligibility. Contributions are deducted from paychecks and available for use at the start of the plan year.
Here’s a table of common eligible LPFSA expenses and guidelines:
| Limited Purpose Flexible Spending Account |
|---|
| $3,400 annual maximum |
| Dental expenses such as copays, deductibles, and coinsurance |
| Orthodontia expenses |
| Vision care expenses such as contracts, glasses, and LASIK surgery |
| Your entire election is available immediately regardless of actual payroll deduction amounts |
| Carry over up to $680 for the following calendar year |
| Expenses must be incurred by December 31st and submitted for reimbursement by March 31st of the following year |
Contributions
The Liberty Company will contribute up to $500 into your HealthEquity HSA Account for individual coverage and $1,000 for “family” coverage, based upon your enrollment date. Family coverage for this plan is defined as any coverage other than single. If you currently have an HSA Account with another vendor, you can choose to transfer the money to your HealthEquity account as we will no longer be sending contributions to other vendors. Please contact your account administrator and HealthEquity for additional details.
Maximum contributions are set by the IRS. For 2026, the total (employer & employee) maximum contribution is $4,400 for single coverage, or $8,750 for family coverage (per household). An annual catch-up amount of $1,000 is available for employees ages 55-65.
To contribute to an HSA, you cannot maintain a Flexible Spending Account (FSA) except for a Limited Purpose FSA, which is a new offering by The Liberty Company this year! If at any point you change medical plans and are no longer enrolled in the Cigna HDHP Plan, you cannot continue to contribute to your HSA. However, you may still use any funds in your HSA to pay for qualified medical expenses.
Eligible Expenses
Funds can be spent on eligible medical expenses. Examples include any out-of-pocket medical expenses tied to an employer health plan. This includes co-payments, deductible expenses, co-insurance, and prescription drug costs.
It also covers other medical services that may not be included in your health plan such as dental, vision, chiropractic, or counseling services. Many over-the-counter items are eligible as well. Some examples of over-the-counter medical devices and supplies that are eligible include birth control, first aid supplies, Health monitors, insulin and diabetic supplies, and more. Some examples of eligible over-the-counter drugs and medicines include acne medications, allergy and sinus medications, cough cold and flu medicines, pain relief medications, and more.
It’s important to note that under an HSA, funds may be used only for dependents who are under the age of 19, or 23 if a full-time student. If your health plan allows a child to the age of 26, but they are not a tax dependent, their expenses are not considered eligible for HSA withdrawal. For a more comprehensive list of what’s eligible as well as an eligible expense lookup tool, visit the Eligible Expenses page on the HealthEquity website https://www.healthequity.com/hsa-qme for a comprehensive list & lookup tool.
Tax Forms
If you decide to open an HSA, you will need to report information about your account your taxes. Available from Health Equity will be IRS Form 5498-SA to report total account contributions, IRS Form 1099-SA to report all account distributions, and other tax information about your account performance throughout the year which you can see from the HSA Management Portal. Available from your employer will be your W-2. In box 12, your employer will report all your tax-free contributions to your HSA. When you file your taxes for the year, you’ll need to file IRS Form 8889 which calculates deductions and eligible withdrawals. If you use tax preparation software, it will ask you a few HSA questions and complete this document for you.
Remember your money is saved pre-tax, grows tax-free and is withdrawn tax-free. You own your HSA. Your account carries over from year to year and goes with you if you take a job with another employer.
In accordance with the USA Patriot Act, you may be asked to provide HealthEquity with identification documentation to verify and establish your HSA.
The HSA is administered by HealthEquity. You can connect to HealthEquity at https://www.healthequity.com/ or by calling their 24/7/365 customer service line at 866-346-5800.
Remember your money is saved pre-tax, grows tax-free and is withdrawn tax-free. You own your HSA. Your account carries over from year to year and goes with you if you take a job with another employer.
In accordance with the USA Patriot Act, you may be asked to provide HealthEquity with identification documentation to verify and establish your HSA.