Health Savings Account
The Maroon Savings Choice medical plan will include a Health Savings Account (HSA) administered by HSA Bank, a division of Webster Bank, an FDIC-insured institution. You can use this account to pay for qualified health expenses, including deductibles, coinsurance, dental, vision, and prescription drug expenses. Since the HSA is a bank account that you own, you will be issued a debit card. As the account holder, you will be responsible for all banking fees such as replacement of a debit card or ordering checks. You can use your debit card or check to directly pay providers for your eligible out-of-pocket health expenses.
Any unused funds will roll over, allowing you to build tax-free savings for future health care needs, including medical expenses during retirement years. You can also grow your HSA savings through TD Ameritrade and Devenir self-directed investment options (through HSA Bank's internet banking). There is a $1,000 minimum requirement to open a self-directed investment account with your HSA funds.
Each calendar year, the University will contribute up to $500 to the HSA for those enrolled as individuals or up to $1,000 for those enrolled with a spouse and/or children. The contribution amount is based on coverage start date. You must be an active employee to receive the University contribution.
You have the option to contribute additional funds to your HSA through pre-tax payroll deductions, up to the IRS limit set for your coverage tier. If you are age 55 or older, you may contribute an additional $1,000 each year, regardless of your coverage tier. You may make changes to your elected contribution amount throughout the year; no life change event is required. In addition to pre-tax payroll deductions, you may contribute by check/money order or transfer/rollover funds directly to HSA Bank.
The Internal Revenue Service (IRS) limits the amount you can contribute to an FSA as shown in the table below.
|2020 IRS Maximum||$3,550||$7,100|
Important Information to Know
- Your HSA will operate just like a bank account. Once your account is opened, you will be required to maintain the account, including making updates to your address and marital status, directly with HSA Bank.
- HSA Bank must comply with the Patriot Act, and may ask you to provide proof of your identity. If HSA Bank sends you a Consumer ID Verification request, you must submit the requested documents within 60-days. Failure to do so will result in closure of your account.
- Some states (California, Alabama, and New Jersey) will apply state taxes to contributions.
- You are not required to provide proof that an HSA distribution was used exclusively for an eligible out-of-pocket health expense; however, you will want to maintain records showing that payments were for qualified health care expenses in the event of an IRS audit.
- Investment accounts are not bank guaranteed or FDIC insured and are the sole responsibility of the account holder.
- HSA Bank will provide monthly account statements, a year-end status report, and IRS Forms 5498-SA and 1099-SA to report contributions and distributions on your tax returns.
- All participants in a qualified health savings account should designate a beneficiary for their HSA account.
- A beneficiary can be one or more individuals (i.e., spouse, children, relatives, or friends) or organizations, such as a trust or charity.
- By having a designated beneficiary in place at the time of your death, the assets of your HSA can be distributed according to the designation. In the absence of a designation, your beneficiary is your estate.
- If you wish to designate a beneficiary or update your current beneficiary with HSA Bank, simply follow these easy steps, Designating a Beneficiary for Your HSA.
- IRS rules state that participants cannot be covered in any other Traditional Health Plan, Health Care Reimbursement Account (HRA), Health Care Flexible Spending Account (FSA), Tricare, and/or VA benefits.
- You cannot be claimed as a dependent on another person's tax return (excluding your spouse's).
- You cannot be enrolled in Medicare.
- Your HSA effective date will be the 1st day of the month following enrollment in the HDHP Maroon Savings Choice PPO. No contributions will be made to your HSA before your HSA effective date, whether from the University or from your payroll deductions. (Please note, if you are hired in December, you will not be eligible to receive an HSA contribution until January 1st of the following year.)
- You are responsible for informing HSA Bank if you are not eligible for an HSA.