Health Savings Account Payflex.com | PayFlex HSA Video | HSA FAQs | HSA Flyer | Quick Reference Guide | Consumer's Guide A Health Savings Account (HSA) is a tax-favored savings account that is used to pay for qualified medical expenses, which includes deductibles, coinsurance, prescription medications, contacts, dental braces, travel, and lodging expenses. ( Visit IRS Publication 502 for a detailed list). All HSAs will be administered by PayFlex, the same vendor that currently services the FSA plans. HSA's offer Triple Tax Savings: Tax-free payroll contributions from the employee and UAH Tax-free earnings on any HSA funds invested. Tax-free distributions, when and if HSA funds are used to pay for qualified medical expenses. HSA Investments You have the opportunity to grow your HSA balance. How? By investing in a variety of mutual funds. Review the links below for more information. Investing Your HSA | BNY Investment Slate | Fund Performance HSA Employer Contributions UAH will contribute money to help pre-fund your HSA. You must enroll in the High Deductible Health Plan (HDHP) and open your HSA to receive this money! If you enroll in the HDHP, you must also enroll in the HSA to receive UAH pre-funds. TierUAH Seed Money Employee Only $450 Family without Spouse $900 Family with Spouse $900 HSA IRS Contribution Limits Annual Contribution Limits HSA Contribution Employee Only: $3,600 per year Family: $7,200 per year The annual contribution limits set by the IRS are a combination of both employee and employer contributions. See the examples below. UAH Seed Money+Employee Contribution=Annual Limit Employee Only$450+ $3,150 = $3,600 Family$900+ $6,300 = $7,200 Employees age 55 or over can contribute an additional $1,000 in the HSA each year. IRS Eligibility Rules In order to be eligible to contribute to a Health Savings Account: You must be covered by a qualifying High Deductible Health Plan (HDHP). You cannot also be covered by any other non-HDHP plan, even if the coverage is secondary. You cannot have other coverage on your spouse’s PPO plan. You cannot be enrolled in any Medicare or TRICARE plan. You cannot be eligible for VA benefits and have received health benefits or prescription drugs from the VA within the last 3 months, unless for a service-connected disability. You cannot be claimed as a dependent on another person’s tax return. You cannot use your HSA to pay for ineligible dependents. The IRS considers children to be tax-dependents up to age 24, if a full-time student. In contrast, the Affordable Care Act (ACA) allows children to remain on a parent’s plan until age 26. Therefore, employees may cover their 25 year old dependent on the HDHP plan but they cannot use HSA funds to pay for that child’s qualified medical expenses. You or your spouse cannot be enrolled in a Healthcare Flexible Spending Account (FSA) or Health Reimbursement Account (HRA). The IRS considers an FSA to be a health plan that pays or reimburses qualified medical expenses for you and your dependents. Because an FSA provides “like or similar coverage” to an HSA, its coverage would make an employee ineligible to contribute to an HSA. This restriction does not apply to the Dependent Care FSAs for childcare expenses. HSAs Offer a Retirement Savings Option: Employees may invest excess funds over $1,000 in IRA-like investments including annuities, CDs, stocks, bonds, mutual funds, etc. After age 65, an employee can use HSA funds to pay for Medicare premiums or long-term care.