Tax-advantaged Benefit Accounts

Tax‑advantaged savings accounts help you set aside money for healthcare or dependent expenses using pre‑tax dollars, reducing taxable income and supporting financial well‑being.

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You have tax-advantaged spending accounts available to you and administered by Optum Financial. You will receive a debit card that allows you convenient access to your accounts at any time. If you enroll in the PPO Plan, you’ll automatically receive the HRA. If you enroll in CDHP, you’ll automatically receive an HSA as long as you have a SSN. You may also need to verify identification. Flexible Spending Accounts are available whether you enroll in medical coverage. The Dependent Care FSA is available if you have qualifying dependents who receive care while you are working. Forget to use your Optum debit card? No worries, just complete the Optum Claim and Reimbursement form and submit it to Optum.
Flexible Spending Accounts

Flexible Spending Accounts

The university offers three FSAs including a Health Care, Dependent Care and Limited Purpose FSA. Flexible Spending Accounts (FSAs) are available only to active, current employees and are not offered to retirees.
Health Reimbursement Account (HRA)

Health Reimbursement Account (HRA)

The Health Reimbursement Account (HRA) is available if you enroll in the CDHP. Unlike the HSA (where you have full ownership of the account), the university has full ownership of the HRA.
Health Savings Account (HSA)

Health Savings Account (HSA)

A Health Savings Account (HSA) is a tax-advantaged savings account available to individuals enrolled in a high-deductible health plan (HDHP). It allows you to set aside pre-tax money to pay for qualified medical expenses and more.

Below is a table showing the stacking order for how tax-advantaged expenses are paid.

OrderAccount TypeUsage Description
1Health Reimbursement Arrangement (HRA)Used first for eligible medical and prescription expenses. The HRA is paired with the PPO medical with HRA plan.
2Flexible Spending Account (FSA)Used after HRA funds are exhausted. May be used on eligible medical, prescription, dental and vision expenses. May enroll if enrolled in the PPO medical with HRA or ULH medical plan, or if waiving medical coverage.
3Limited Purpose Flexible Spending Account (LPFSA)May be used for eligible dental and vision expenses. The LPFSA paired with the CDHP medical plan.
4Health Savings Account – Prior Year Funds (HSA)Funds will pull last. If employees want to pull funds first from HSA, they can go through Optum’s mobile app or Optum’s online portal. May be used for eligible medical, prescription, dental and vision expenses. The HSA is paired with the CDHP medical plan.

Comparison of Each Tax-advantaged Spending Accounts 

Below is a comparison of each of the tax-advantaged spending accounts. Remember, if you enroll in the PPO Plan, you’ll automatically receive the HRA. If you enroll in the CDHP, you can opt in to receive the HSA. The Health Care FSA and Limited Purpose FSAs are available in addition if you want to maximize your tax savings.

 

HRA

Health Care FSA

*HSA

Limited Purpose FSA

Who is eligible?

Enrolled In: PPO Plan

Enrolled In: PPO and ULH Plans or waive medical coverage

Enrolled In: CDHP 

Enrolled In: CDHP 

Tax-free eligible expenses:

 

 

 

 

Medical

X

X

X

 

Prescription drugs

X

X

X

 

Dental

 

X

X

X

Vision

 

X

 

X

 

X

 

UofL contributes

X

 

X

 

You contribute pre-tax dollars

 

X

X

X

Balance remaining at the end of the year rolls over to the next year

X
(up to the UofL annual contribution)

X

(up to $660)

X

 

*At age 65, you can use your Health Savings Account (HSA) for any purpose without incurring a penalty, but the funds will be subject to ordinary income tax if it is not a qualified expense. This means you can withdraw your HSA funds for nonqualified expenses without facing a 20% penalty which applies if you are under 65. However, you will still need to pay income tax on the amount withdrawn.

Contact Optum 

Customer Service: 866-860-7260

Website: Optum 

Mobile App: Optum Mobile App 

Optum Reimbursement Instructions & Claims Form (PDF)