Different from the Health Care FSA (which is an independent pretax spending account for medical expenses), the Health Savings Account (HSA) is a pretax savings account only available to employees enrolled in the Consumer Driven Health Plan (CDHP) medical plan.
To be eligible to make contributions to a Health Savings Account (HSA), you must be enrolled in the BlueEdge CDHP medical plan and not be covered by another health plan that is not a high-deductible plan such as your spouse’s medical plan, a full-purpose FSA or Medicare. Additionally, you may not be claimed as a dependent on someone else’s tax return. To determine if you are eligible to have a HSA you are advised to talk to your tax advisor and review the following documents:
Be aware of restrictions if also covered by a Health Care Flexible Spending Account (FSA) Plan. Generally, coverage under you or your spouse’s FSA will cause you to be ineligible for an HSA since the FSA is considered a health plan without a high deductible. However, you or your spouse may be covered under a Limited Purpose FSA (LP FSA) and you will still be eligible for an HSA. An LP FSA reimburses only dental and vision services (see the Flexible Spending Account Summary Plan Description for more information).
Caution: If you are covered under a Full Purpose FSA (not an LP FSA) that has a “Grace Period” such as the DePaul FSA, and have a balance in that account as of December 31st, you will not be able to have contributions made to your HSA until April 1st of the following calendar year.
A “Grace Period” is a feature of an FSA that allows you to obtain services through March 15th and obtain reimbursement from amounts you contributed to the FSA in the previous year.
If you or your spouse has established a medical Full-Purpose FSA with a grace period, you must have a zero (0) balance in the plan by December 31st to begin contributions and receive the employer contribution in January of the following year.
Contributing to Your HSA
Once you enroll in the CDHP and open an HSA, DePaul will make an annual contribution and you can make tax-free contributions into your HSA each year you are enrolled.* Employee contributions through salary reduction will only be allowed prospectively.
On March 5, 2018, the IRS announced that it had lowered the 2018 contribution limit for family HSA coverage from $6,900 to $6,850. The contribution limit for single coverage remains $3,450 and the age 55+ catch up limit remains $1,000.
*Contributions are prorated when enrollment in the CDHP occurs after January
Maximum Contribution Restrictions-Employees not HSA eligible for the entire plan year in which they are making contributions must be HSA eligible in December of the plan year and remain eligible for the next 12 months in order to make the maximum contribution. If an employee is not eligible for the requisite period, then the employee will become subject to the approximate tax rules and excess contributions will be subject to regular taxes as well as an excise tax. You may want to review the IRS Resource Center and/or consult your tax advisor before you increase your contributions.
Establish a Health Savings Account with BenefitWallet (if necessary)
Open your HSA account with BenefitWallet by visiting the Advantage Direct enrollment site or wait for your welcome packet with instructions to be delivered to your home within a few weeks of enrolling in the BlueEdge CDHP Medical Plan. Once your HSA is established, you will receive a debit card in the mail for use with your account.
IMPORTANT: If you do not establish a bank account, DePaul University will not be able to make the employer contribution to your HSA and you will not be able to elect pre-tax HSA salary reductions from your pay. Additionally, you may forfeit your right to receive an employer contribution for the year.
Making Mid-year Changes to Your Health Saving Account Contributions
You may change the amount of your Health Savings Account pre-tax deduction at any time. To make mid-year changes complete the DePaul University Health Saving Account (HSA) Contribution Election Change Form and submit it to Human Resources.