Health Savings Account (HSA) FAQ

A health savings account (HSA) is a tax-exempt savings account into which both the employer and employee can deposit money (up to an annual limit specified by the IRS) on a tax-preferred basis. The idea is simple: after enrolling in a qualified High Deductible Health Plan (HDHP) and opening an HSA, members can use accumulated tax-free contributions to pay for health care costs for themselves, their spouse and any tax dependents - including doctor and hospital visits, co-payments, eyeglasses, prescriptions, certain long-term care insurance premiums and COBRA premiums.

The employee must be an eligible individual to qualify for an HSA. An HSA offers valuable savings:

• Contributions are tax free
• Growth in interest and earnings are tax free
• Withdrawals for eligible medical expenses are tax free

Any balance left over at the end of the year stays with the individual, available regardless of job changes or retirement. Balances earn interest and may be invested, offering HSA owners the ability to set aside thousands of dollars for future health care needs.

• Covered under a qualified High Deductible Health Plan (HDHP)
• Not covered under any other health plan that isn’t HDHP
• You cannot be enrolled in any part of Medicare
• Neither you nor your spouse can have a medical Flexible Spending Account (FSA). A Limited Flexible Spending Account and Childcare FSA are allowed.
• You cannot be claimed as a dependent on another person’s federal income tax return
• You cannot have received health benefits from the Veterans Adminstration in the past 90 days. If you have, there is a 90 black-out period for contributions to the HSA.
• NOTE: Your spouse’s insurance coverage has no impact on your eligibility unless you are covered by a spouse’s health insurance and it is NOT a qualified HDHP.

Employees who wish to participate in an HSA must be enrolled in the High Deductible Health Plan, cannot be enrolled in any part of Medicare, cannot be claimed as a dependent on another person’s tax return, and cannot be enrolled in any other non-qualified medical plan including Medicare and military plans. HSA’s are not use-it-or-lose-it plans. The contributions you make to the account roll over year to year and are yours to take with you if you leave the University. The HSA is not pre-funded. You use what is available in the account after it has been deposited. Management of your HSA is your responsibility. You must first open your account before funds may be deposited (including any employer contributions) or withdrawn to pay for qualified medical expenses.

Fill out the paper enrollment form to sign up.

You can choose either or both of the following options:

Vanguard Mutual Funds:

• Choose up to four of the 22 Vanguard® Funds offered.
• Click here to view the list of the 22 Vanguard mutual funds offered.

Debit Card:

• FDIC insured/APY varies on account balance
• No monthly low-balance fee/optional checks available
• Note: Debit Card cannot access Vanguard Funds

Securities offered through The Vanguard Group, Member NASD SIPC. Security products: Not insured by FDIC or any Federal Government Agency; May Lose Value; Not a Deposit of or Guaranteed by the Bank or any Bank Affiliate.

Coverage of Adult Children

While the Patient Protection and Affordable Care Act allows parents to add their adult children (up to age 26) to their health plans, the IRS has not changed its definition of a dependent for health savings accounts. This means that an employee, whose 24-year-old child is covered on his HSA-qualified highdeductible health plan and not a tax dependent, is not eligible to use HSA funds to pay that child’s medical bills.

The benefits are:

• The University will make an annual employer contribution to your HSA
• Your HSA payroll contributions and employer contribution will be forwarded to HealthSavings Administrators
• The University will pay the annual administrative fee if you remain in the High Deductible Health Plan

For the 2022 tax year, the maximum contribution is $3,650 for individuals and $7,300 for a family. Account holders age 55 or older can contribute an additional $1,000 to amounts listed above. The University will contribute annually $500 for individuals and $1,000 for a family. Please note that the University contribution is included in your contribution maximum. The University’s contribution normally will be deposited a portion each paycheck.

• Employee
• Family members
• Your employer
• Any other person including a "non - individual"

Yes. You may contribute to an HSA outside of payroll deductions by submitting a personal check or online contribution to Health Savings Administrators. Click here for more information. Please sure to monitor of all contributions for the year to ensure you do not exceed your annual maximum contribution limit.

You may make contributions to your HSA until April 15th for the prior tax year.

• The custodian will report all withdrawals on for 1099-SA. All contributions will be reported on form 5498-SA. Both forms are sent to the IRS and to the taxpayer.
• Individual must report contributions and distributions on IRS Form 8889.
• The custodian is not responsible to monitor limits or distributions.

• Determine eligibility
• Determine if contributions/distributions are qualified
• Seek tax and/or legal assistance
• Seek investment advice

• If the spouse is the beneficiary - account becomes his/hers and can still be used tax free for eligible medical expenses
• If the spouse is not the beneficiary, the HSA becomes part of estate. (Fair market value is calculated on date of death.)

Health Savings Accounts (HSAs) and Healthcare Flexible Spending Accounts (FSAs) are both great ways to reduce your income taxes by paying for medically-related expenses with pre-tax money - that is, money deducted from your paycheck before income taxes are calculated on your pay. Both types of accounts work similarly, in that you can deposit pre-tax money into the account, and use the account to pay for various tax-deductible medical expenses as they occur. But the two types of accounts operate quite differently.

A healthcare FSA and/or a spouse’s healthcare FSA are not allowed if the employee and/or spouse are enrolled in the HDHP. Healthcare FSAs must be closed by December 31 before HSA contributions can be established for the New Year. For participants who have FSA funds remaining in their account after December 31, employer and employee HSA contributions will begin after April 1 of the New Year.

You may withdraw funds online, via your debit card or by mail or fax.

• If you have a cash account, an electronic statement will be posted to your online account each month and you’ll be notified via email.

• If you have investments, your statement will be sent in the mail each quarter. If you’ve opted to receive your statements electronically, you’ll be notified via email when your statement has posted to your account.

• If you have both cash and investments, you will receive monthly email notifications and your quarterly statement in the mail. If you’ve opted to receive your quarterly statement electronically, you’ll be notified via email when it’s been posted to your account.

• Form 1099-SA is mailed at the end of January.
• Form 5498-SA is mailed at the end of May.

Your debit card is accepted at ATMs and by medical providers who accept Visa® (e.g., doctors’ offices, pharmacies, medical supply stores, etc.).

To safeguard against improper or accidental use, debit cards are restricted to merchants that provide medical products and services. If you need to make a purchase from a non-medical merchant for an eligible medical expense, you may purchase the product or service out-of-pocket and reimburse yourself later from your HSA.

After you receive a bill for a qualified medical expense, fill in your debit card number on the payment form and return your payment to the address noted on the bill.

Yes. For your security, there is a daily limit of $2,000 for point-of-sale purchases and $500 at ATMs. If you need to pay a larger medical expense, contact us to request a temporary limit increase. Remember that funds are deducted from your cash account, so you must have sufficient funds in your cash account to cover the expense(s).

You have options! You can pay part of the expense from your HSA and the remaining portion using another payment method. You can also pay the entire expense using another payment method and reimburse yourself later from your HSA or ask the medical provider to set up a payment plan.

Yes, it’s possible to overdraw your cash/debit account and incur fees if your HSA does not have sufficient funds to cover the transaction when processed. To avoid fees, we strongly encourage you to monitor your account balance and debit card purchases.

If you use your debit card for a non-qualified medical expense, you must report the expense on your income taxes and are subject to income tax and a 20% penalty. To prevent this, complete and submit our Distribution Reversal Form before filing your taxes on April 15.

Contact HealthSavings Administrators immediately at (888) 858-2739.

Yes, both spouses can make catch-up contributions provided that they both 1) are 55 or older, 2) are eligible for health savings accounts, and 3) have established their own separate health savings accounts. For 2021, the total HSA contribution limit for two eligible spouses who are each 55 or older with separate accounts is $9,200. This maximum limit is true whether the spouses are each covered by separate individual health insurance plans or if they are covered together under the same health insurance plan.

No, you cannot make a catch-up contribution into anyone else’s health savings account. You can only make a catch-up contribution into your own health savings account.

No, you don’t. If you are an eligible individual who is age 55 or older at the end of a particular year, you are permitted to make up to a $1,000 catch-up contribution that year. Your contribution doesn’t need to be prorated based on what month you turned 55.

Yes. If you do not remain eligible that entire year, you must prorate your catch-up contribution based on the number of months you were eligible. For example, if you were health savings account-eligible at the beginning of the year and lost eligibility in August, you can make a catch-up contribution of up to $666.67 (8/12 x $1,000), since you were eligible 8 months out of the year.

If you remain an eligible individual the entire year you turned 55, you do not need to prorate your catch-up contribution.

No, you cannot. Once you enroll in Medicare, you lose health savings account eligibility, which means you cannot make catch-up contributions any more. However, there is a movement in Congress to allow Medicare recipients to keep funding and using their health savings accounts. Contact your representative in Congress if you want to support this measure.

Yes, as long as you are otherwise health savings account-eligible and have a health savings account, you can make catch-up contributions.

No, the catch-up contribution limit is always $1,000, regardless of the type of health insurance coverage you have.