Pre-tax Contributions

The Health Savings Account (HSA) is available with medical plans C and N, and allows the employee to make pre-tax contributions to a savings account which can be used for qualified health expenses. Simply put, if you expect to pay for any medical deductibles, dental or vision expenses, prescription medications, contact solution, or any other eligible expenses.pdf, then you can take home more of your salary and reduce your income taxes by paying for those expenses through the HSA.

Savings Account

Unlike Flexible Spending Accounts, the HSA is a savings account. The difference is that the money contributed to an FSA must typically be spent before the end of the year. In contrast, the HSA lets you save the money until you need it, and it earns interest while it is in the account.

Investment Options

In addition to the interest you will earn, you also have the option to invest the money in your account after meeting the $1000 minimum. Just like the contributions to the account, the returns on the investments are also tax free. This means your HSA can grow even faster!

Portability

The HSA is portable which means you get to take it with you when you retire (or if you ever choose to leave). Once money goes into the account, it is yours to spend when you need it.

Employer Contributions

The contributions are made quarterly by ESU, on the 1st pay period in January, April, July, and October. Your first employer contribution will be pro-rated based on your benefits effective date. Contribution amounts are described in the charts below.

Provider Information

The Health Savings Account is administered by MetLife. Their contact information, along with other helpful information about HSA’s can be found on the State Employee Health Plan page.

* Employees and spouses may each earn an additional $500 added to the HSA by participating in the HealthQuest Rewards Program. See the HealthQuest section of the medical page for more information.

** Employees must contribute $25 per pay period to the HSA.

* Employees and spouses may each earn an additional $500 added to the HSA by participating in the HealthQuest Rewards Program. See the HealthQuest section of the medical page for more information.

HSA Eligibility

Employees must be enrolled in a qualified high-deductible plan (plan C or N) to qualify for an HSA. Under IRS guidelines, employees are NOT eligible to enroll in an HSA if any of the following apply:

• The employee is enrolled in Medicare.
• The employee is covered by an additional health plan that is not a Qualified High Deductible Health Plan.
• The employee is enrolled in the standard Health Care Flexible Spending Account (HCFSA). *You may enroll in and start contributions to the HSA, but your balance in your HCFSA, up to $500, will be rolled into a limited purpose flexible spending account.
• The employee is covered by TRICARE.

HSA Rules for Dependents Under Age 26

For all HSA plans, the IRS definition of an eligible dependent is when the HSA account holder is able to "claim" the child/relative as a dependent on their tax return. If the HSA account owner cannot claim the dependent on their tax return, they are not allowed to spend HSA dollars on services provided to that child/relative. The IRS defines a qualifying dependent child as follows:

• Daughter, son, stepchild, sibling or stepsibling (or any descendant of these)
• Has same principal place of residence as the account holder for more than one-half of taxable year
• AND not yet age 19 or if a student is not yet age 24
• OR permanently and totally disabled.

As a result, dependents may be covered by Plan C or N up to the age of 26 under the Affordable Care Act, but may not benefit from HSA funds after they reach age 24 according to the IRS. HSA funds used in violation of this rule will be taxable and could be subject to penalties.

For more detailed information about IRS regulations on health savings accounts, see eligible expenses.pdf, or HSA requirements.pdf.