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Health Savings Account (HSA)
Now change your HSA contribution online! Paper form no longer required. Access your ESS account to make changes online at any time!
A Health Savings Account (HSA), available only to High Deductible Health Plan members, lets you control how you save, invest, and use your healthcare dollars. An HSA is a bank account (much like a personal savings account) but the money in it is used to pay for health care-related expenses. You own and control the money in your Health Savings Account.
The High Deductible Health Plan is your medical plan. The HSA is a companion savings account that is opened for you when you enroll in the HDHP. You can use the funds in your HSA to pay for out of pocket medical and related expenses. Or, you can save the money in your HSA to use for qualified expenses when you retire. It’s your choice. Learn more so that you can Choose Well.
Getting Started & Answering Your Questions
To be eligible for a Health Savings Account at UC:
- You must be enrolled in the High Deductible Health Plan at UC
- You cannot be claimed as a dependent on someone else’s tax return
- You cannot be covered by a spouse’s Flexible Spending Account
- You cannot be covered by any other medical plan (unless it is an HSA-qualified plan), and
- You cannot be entitled to or enrolled in Medicare Part A and/or B
You can use the funds in your HSA to pay for the medical expenses of dependents covered by another health plan, even if it is not an HSA-qualified plan, as long as they are eligible dependents as defined by the IRS.
Medical expenses incurred by or on behalf of a domestic partner who is not a tax dependent are not eligible for reimbursement under the HSA. Check with your tax advisor for additional information.
For additional detail regarding HSA eligibility requirements, see IRS Publication 969.
After you enroll in the HDHP an HSA will automatically be opened for you through Health Equity Bank.
Because you fund the HSA with pre-tax money, you're using tax-free funds for healthcare expenses you'd normally pay for out-of-pocket. Your HSA contributions don't count toward your taxable income for federal taxes. They're not taxable in most states, as well.
The money always belongs to you, even if you leave the university. Plus, unlike a Flexible Spending Account, unused funds carry over from year to year so you never have to worry about losing your money.
You can use HSA funds for IRS-approved items including doctor office visits, dental services, prescription drugs and over-the-counter medications. For a sample list of IRS-approved expenses, refer to IRS Publications 969 and 502. Keep in mind the IRS may allow or disallow any expense because of circumstances involved.
You can spend only the money that's actually in your HSA. If your healthcare expense is more than your HSA balance, you need to pay the remaining cost another way, such as cash or personal check. You can request reimbursement after you have accumulated more money.
Every time you use your HSA, save your receipt in case the IRS asks you to prove that your claim was for a qualified expense. If you use HSA funds for a nonqualified expense, you'll pay tax and penalty on the ineligible amount.
Your HSA is an inheritable asset! Remember to assign a beneficiary. Click on the form to name a beneficiary for your account.
You have TWO opportunities for Health Savings Account contributions.
Once your Health Savings Account (HSA) is established, the funds in it can be used to meet your deductible, pay current eligible medical expenses, or be saved for future medical expenses, even after retirement. Contributions to your Health Savings Account come from the following sources:
- UC – contributions are based on your base pay salary level as of January each year – see below, and
- You – contributed on a pre-tax basis through automatic payroll deduction.
Refer to the Employee Contribution Chart to find current UC Health Savings Account (HSA) contributions.
UC’s Contributions to a Health Savings Account - Non-AAUP
If you are enrolled in the HSA/HDHP on January 1st, UC will make a contribution to your Health Savings Account. UC will put money in your Health Savings Account the week following your pay date. If you are a monthly paid employee, contributions will be sent to the bank the first week of the month following the monthly payroll. If you are a bi-weekly paid employee, contributions will still be sent to the bank the week following each payroll period.
UC’s Contributions to a Health Savings Account - AAUP
HSA funding will be made on a monthly basis. The monthly funding will be made available in the first week of the month following pay day; as an example, July's funding will be available in the first week of August.
For employees who enter the plan any time after January 1st, UC’s contribution will be pro-rated based on the plan effective date. Pro-rated contributions will be made on a monthly basis.
Your HSA Contributions
In addition to the contributions from UC, you can also contribute to your HSA. You can make contributions in one of three ways:
- Pre-tax payroll deduction;
- After-tax electronic funds transfer; or
- Manually mailed after-tax payment.
The most convenient and advantageous way to contribute is through pre-tax payroll deduction. Monthly payroll contributions are deposited during the first week of the month following the month in which they are deducted (e.g., January contributions are deposited during the first week of February).
You can change your Health Savings Account contribution at any time through Employee Self Service. You can choose any amount to contribute to the HSA as long as your total contributions for the calendar year do not exceed the IRS maximum. You are responsible for monitoring your total IRS contributions.
You are able to ‘pre fund’ your account – for example, if you anticipate a large expense in January, you can choose to contribute a larger amount in January to cover this expense. Then in February or March, you can reduce this amount by making a new election using the form above.
The IRS limits how much you can contribute to the Health Savings Account. You are responsible for making sure your contributions don’t exceed the maximum.
You can make changes to your method of contribution as well as your contribution amount at any time during the year; payroll deduction changes are processed monthly.
IRS Restrictions on HSAs if you have a 2018 Health Care Flexible Spending Account Balance
IRS Contribution Maximum: Please access the IRS.gov website to determine current year Health Savings Account contribution maximums.
In accordance with IRS regulations, if you are enrolled in the HDHP/HSA Plan for 2018 and have a balance in a 2018 Health Care Flexible Spending Account (FSA) as of December 31, 2018, you are not eligible to contribute funds to an HSA or receive any funds in your HSA until April 1, 2019. This includes UC’s contribution. The April 1, 2019 date applies even if your Healthcare FSA account balance reaches $0 at an earlier point in 2019.
Additionally, if you have a balance in your Health Care FSA as of December 31, 2018 any medical expenses incurred prior to April 1, 2019 are not eligible for reimbursement with HSA funds. Expenses must be incurred after April 1, 2018 in order to use HSA funds.
You will need to consider whether or not you anticipate having a Health Care FSA balance on December 31 when making your decisions about enrolling in the HDHP/HSA Plan for the following year, including making any contributions to the HSA through payroll deduction.
If you have a $0 balance in your 2018 Health Care FSA as of December 31, 2018, you are HSA eligible on January 1, 2019 and you (and UC) can make contributions to the account and eligible medical expenses can be paid with your HSA funds.
The above does not apply to the Dependent Care Flexible Spending Account.
- HealthEquity is the university’s health savings account banking partner. If you enroll is an HSA/High Deductible Health Plan you will automatically be enrolled in an HSA through Health Equity. You will receive a visa debit card, sent to your home address of record in the UC system, by Health Equity.
- HealthEquity has helpful resources and information about your HSA. Visit the Healthy Equity page for details.
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