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Q & A with HR Service, Inc.

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Q& A - HSA, FSA, HRA, COBRA, 5500 & SPD Wraps

What are the benefits of an HSA? 

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Schedule A (Form 1040).

  • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.

  • The contributions remain in your account until you use them.

  • The interest or other earnings on the assets in the account are tax-free.

  • Distributions may be tax-free if you pay qualified medical expenses.

  • An HSA is “portable.” It stays with you if you change employers or leave the workforce.

How can ARPA Help with COBRA?

If you’re losing job-based coverage and haven’t signed up for COBRA, learn about your rights and options under COBRA HERE.

What is an HSA?

An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.

Can I contribute to my HRA?

You cannot contribute to your HRA. It is owned, defined, and completely funded by your employer. It’s one of the ways your employer helps you make healthcare more affordable.

How do I qualify for COBRA?

According to the Department of Labor, to qualify for COBRA you must fall under three conditions to be considered for coverage:

  • You must have an event that qualifies you for COBRA coverage.
  • COBRA must cover your group health plan.
  • You must be a beneficiary that is qualified for the specific event.

How much can I contribute to my FSA?

IRS contribution limits in 2020 allow you to set aside $2,750 into a medical or limited FSA and $5,000 into a dependent care FSA.

What is an FSA?

A flexible spending account (FSA) is a type of savings account that provides the account holder with specific tax advantages. 

What is a Summary Annual Report?

Once a Form 5500 is completed and filed, you must prepare a Summary Annual Report (SAR) for each of your welfare benefit plans subject to ERISA reporting. After submitting, the SAR summarizes Form 5500 information. Then notifies participants that Form 5500 and a copy is available to participants who request. SARs must be distributed to covered participants within nine months after the end of the plan year. A sample SAR format is accessible from

Is there a filing requirement for a cafeteria plan?

Generally, no. If you only have a cafeteria plan, you are not required to file Form 5500 or Schedule F. However, if you have a welfare benefit plan, you may be required under Department of Labor regulations to file a return for that plan. 

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