Welcome, HSA members!

A Health Savings Account (HSA) is one of the most cost-effective and efficient ways to plan for medical expenses, now and through retirement. Why? Because an HSA is a triple tax advantaged account.

You pay no tax on contributions into your HSA or earnings made on funds from your HSA. You pay no taxes on withdraws from your HSA when used for qualified medical expenses.

How does your HSA account work?

  1. Determine how much you want to contribute to your HSA (up to IRS determined annual individual and family maximum amounts)
  2. That amount, divided by the number of pay days you have each year, will be automatically set aside from each paycheck and deposited into an HSA account for you.
  3. You can pay for eligible expenses directly from your HSA account using your white Visa benefits card. Pay for eligible expenses and then request reimbursement from your HSA account or choose to save your HSA for future medical expenses.
  4. Once your HSA balance reaches $2,000, you can choose to invest your HSA funds.

Get reimbursed

Your HSA allows for reimbursements for qualified medical expenses. There are two ways to pay for or be reimbursed for your expenses. They include:

  1. Pay for eligible expenses directly from your HSA account using your white Visa benefits card.
  2. Pay for eligible expenses and request an online distribution from the online consumer portal.

How to enroll

To sign up, just follow the steps below. Please note that your employer will need to be contracted with us for you to enroll. You must also be enrolled in an HSA-qualified HDHP.

  1. Contact your Human Resources or Employee Benefit department for more information on how to enroll.
  2. Determine the annual amount you want to contribute subject to individual and family maximum amounts.
  3. Once you are enrolled, you will receive a welcome email from us with instructions on how to set up your account. You will be required to log into the online consumer portal and agree to the terms and conditions to activate your HSA account.
  4. Your employer will automatically deduct the amount requested from your paycheck and send it to us to be deposited into your HSA account.

Rules and guidelines

  • The 2020 annual HSA contribution limit is $3,550 per year for individuals and $7,100 per year for families.
  • There is an additional $1,000 annual catch-up contribution limit of $1,000 for individuals who are age 55 and older.
  • To contribute to an HSA, an individual most be enrolled in a HDHP with a minimum individual deductible amount of $1,400 and family deductible amount of $2,800 and a maximum out-of-pocket amount of $6,900 for individuals and $13,800 for families.
  • You cannot contribute to an HSA account if you are enrolled in Medicare, covered by any other non-HDHP, or are claimed as a dependent on someone else’s tax return.
  • Withdrawals from an HSA account are tax-free provided they are used to pay for qualified medical expenses.
  • Amounts in an HSA account at the end of the year remain in the account indefinitely to pay for future qualified medical expenses. The account holder will retain ownership of the account and funds even if they change health insurance plans, jobs or retire.

Health Savings Account (HSA) FAQ

Who can have an HSA?

To qualify for an HSA, you must be:

  1. Covered by a qualified High Deductible Health Insurance plan;
  2. Not covered under another health insurance;
  3. Not enrolled in Medicare; and
  4. Not another person’s dependent

Exceptions. The other health insurance does not include coverage for accidents, dental care, disability, long-term care and vision care. Workers’ compensation, specified disease and fixed indemnity coverage are permitted.

How much can be contributed to an HSA?

For 2020, the IRS contribution maximum is $3,550 for an individual and $7,100 for a family (HSA holders age 55 and older get to save an extra $1,000). These contributions are 100% tax deductible from gross income.

How can I tell if a health plan is a “qualifying” High Deductible Health Plan?

The health insurer or your employer can verify the status of your coverage. In addition, the words “qualifying (or qualified) High Deductible Health Plan” or a reference to IRC (Internal Revenue Code) Section 223 will be included in the declaration page of your policy or in another official communication from the insurance company. An HDHP is a health insurance plan that generally does not pay for the first several thousand dollars of healthcare expenses (i.e., your “deductible”), but will generally cover you after that.

It is important when choosing your HDHP that your insurance carrier verify and guarantee that the HDHP meets IRS regulations to ensure your HSA is qualified.

How are HSAs different from health flexible spending accounts (FSA)?

Both HSAs and FSAs allow you to pay for qualified medical expenses with pre-tax dollars. One key difference, however, is that HSA balances can roll over from year to year, while FSA money left unspent at the end of the year is limited to a $500 carryover to the following plan year or a grace period. You may choose to use a limited-purpose FSA to pay for eligible healthcare expenses and save your HSA dollars for future healthcare needs. You may use limited-purpose FSA dollars to reimburse yourself for expenses not covered by your High Deductible Health Plan, such as:

  1. Vision expenses, including glasses, frames, contacts, prescription sunglasses, goggles, vision copayments, optometrists or ophthalmologist fees, and corrective eye surgery
  2. Dental expenses, including dental care, deductibles and copayments, braces, X-rays, fillings and dentures

What are the tax advantages of owning an HSA?

There are three kinds of tax-favored contributions, including:

  1. Employee contributions that are deductible over-the-line (i.e., deductible even by non-itemizers)
  2. Employer contributions that are excluded from income and employment taxes
  3. Salary reduction contributions made through a Section 125 cafeteria plan

All three forms of contributions are exempt from federal income taxes. Employer and salary reduction contributions (section 125 cafeteria plan) are exempt from FICA and FUTA, as well.

Can an HSA be used to pay for premiums?

No, this would be a nonmedical withdrawal, subject to taxes and penalty.

Exceptions. No penalty or taxes will apply if the money is withdrawn to pay premiums for:

  1. Qualified long-term care insurance; or
  2. Health insurance while you are receiving federal or state unemployment compensation; or
  3. Continuation of coverage plans, like COBRA, required under any federal law; or
  4. Medicare premiums

What happens to my HSA if I quit my job or leave my employer?

Your HSA is portable. This means that you can take your HSA with you when you leave and continue to use the funds you have built up. Funds left in your account continue to grow tax-free. If you are covered by a qualified HDHP, you can even continue to make tax-free contributions to your HSA.

Distributions from your HSA used exclusively to pay for qualified expenses for you, your spouse or dependents, are excluded from your gross income. Your HSA funds can be used for qualified expenses even if you are not currently eligible to make contributions to your HSA.

Upon termination, you may be offered to leave your HSA in an account with your former employer or you may transfer it to another custodian. Maintenance fees may be charged by your former employer if you leave your HSA in place.


What happens to my HSA after I reach 65?

At age 65 and older, your funds continue to be available without federal taxes or state tax (for most states) for qualified medical expenses. For instance, you may use your HSA to pay certain insurance premiums, such as Medicare Parts A and B, Medicare HMO, or your share of retiree medical coverage offered by a former employer. Funds cannot be used tax-free to purchase Medigap or Medicare supplemental policies.

If you use your funds for qualified medical expenses, the distributions from your account remain tax-free. If you use the funds for non-qualified expenses, the distribution becomes taxable, but exempt from the 20% penalty. With enrollment in Medicare, you are no longer eligible to contribute to your HSA. If you reach age 65 or become disabled, you may still contribute to your HSA if you have not enrolled in Medicare.

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