Current Provider: ConnectYourCare (CYC)
- Customer Service: 866-347-7276
- ConnectYourCare HSA Enrollment Guide (PDF)
A Health Savings Account, or HSA, is a custodial account established to receive tax-favored contributions on behalf of eligible active employees enrolled only in a qualified WashU high deductible health plan to pay for qualified medical expenses. The IRS regulates HSA plans, so many of the plan design features described below are a result of those regulations.
Amounts are contributed to an HSA on a pre-tax basis, earnings on those contributions accumulate tax-free and distributions are not subject to tax if they are used to pay for eligible medical expenses for employees and their dependents. Contributions made in one year do not have to be used to pay expenses in that year and may be carried over to pay eligible medical expenses at anytime in the future. Similarly, expenses in any year do not have to be reimbursed during the year that they were incurred.
The HSA enables WashU employees to have an account that they can own for health care. The view of HSA supporters is that once employees feel ownership over their health care dollars, they will make cost-effective decisions that will control spending increases and benefit not only themselves, but their employer and other employees. In addition, it provides our employees some opportunity to save for retiree medical expenses on a tax-favored basis while employed.
Not all employees will be better off with an HSA as compared with traditional low deductible or co-pay health plans. Those who are currently infrequent users of health care and/or have higher incomes and are looking for sheltered savings opportunities are likely to be the first to find HSA’s attractive.
You may contribute up to a maximum of $3,350 to the HSA if you are enrolled in individual coverage under the HDHP, or up to a maximum of $6,750 if you are enrolled in family coverage under the HDHP. The University will contribute $400 annually to your HSA account if you are enrolled in individual coverage under the HDHP and you contribute a minimum annual amount based on your wages. The University will contribute $800 annually to your HSA account if you are enrolled in family coverage under the HDHP and you contribute the minimum annual amount based on your wages. The required minimum annual contribution is $200 per year (or at least $400 per year if your annual base salary is $115,000 or more). The $400 University contribution reduces the maximum amount you may contribute to $2,950 for an individual and the $800 University contribution reduces the maximum amount you may contribute to $5,950 for a family. HSA participants who will be age 55 or older may elect to make an additional “catch-up” contribution of $1,000.
The contribution amounts by employees will be made per pay period via payroll deduction (biweekly or monthly). The University’s contribution will be a one time, lump sum deposit coincident with the employees’ first paycheck in January.
Unlike the Health Flex Spending Plan, funds have to be available in the account in order for the participant to be reimbursed for eligible expenses. Participants will receive a mailing containing checks and a debit card from HSA Bank, the plan custodian. These checks and debit card can be used to pay a provider directly for eligible expenses, or the participant can reimburse himself or herself. All record keeping for tax purposes is the responsibility of the employee.
If active employees enroll in the HSA, they are not eligible to enroll in the Health Flex Spending Account (FSA) plan at the same time. Also, employees enrolled in an HSA may only be reimbursed for out-of-pocket health expenses up to the current balance in their account and will need to wait until deposits into the account create a sufficient balance to be fully reimbursed. If active employees enroll in the HSA, they may also be enrolled in the childcare flex-spending plan.
Enrollment in the HSA will be conducted during the annual health/dental and flex spending plans open enrollment each November for the following calendar year. The employee’s annual election to enroll in the HSA is irrevocable and may not be made outside of this annual open enrollment period. Changes to the election amount are only allowed due to a family status change. Participation in the health flex spending plan will prohibit an employee from enrolling in the HSA plan the following year, unless there is no balance remaining in the employee’s health flex spending account as of December 31.
The university will pay the administration fees for all active employees who are currently participating in the plan. Once the employee terminates, retires, or discontinues participation in the HSA, the fees will be the responsibility of the employee.
Points to Remember
- To be eligible to contribute to an HSA, you must be enrolled in a high deductible health plan, must not be receiving Medicare benefits, must not be claimed as a dependent on someone else’s tax return or covered by other non-high deductible health plan coverage. In addition, if you have received VA benefits (including prescription drugs) within the last three months, you cannot enroll in the HSA.
- If you’re enrolled in the HSA and make the minimum required employee contribution, you will receive a $400 contribution from the University as an individual, or an $800 contribution from the University as a family.
- The University contribution can only be made to the HSA account that is sponsored by the University. If you elect not to use HSA Bank through ConnectYourCare, then you will not receive the University contribution.
- You may only enroll in the HSA during the annual open enrollment period in November. You will not be able to enroll after Open Enrollment.
- You may adjust your annual election amount to the HSA during the year only if you experience a family status change. You may be required to change your HSA election if you reduce your coverage level in the HDHP plan (depending on the amount you are contributing to the HSA).
- You own your HSA account and are responsible for keeping receipts/documentation in the event of an IRS audit.
- HSA funds can be used for health care expenses for yourself and all eligible dependents (excludes domestic partners). Dependents do not have to be enrolled in the HDHP.
- Participants will only be reimbursed for eligible health care expenses up to the balance in their HSA.
- Balances remaining at the end of the plan year will roll over to the next year and accumulate to help pay for future health care expenses, even if you are no longer enrolled in a HDHP. However, you can no longer contribute to the HSA if you are not enrolled in a HDHP.
- If you over-contribute to your HSA account, you must take a distribution from the account for the excess contribution amount during the plan year and pay ordinary income taxes on that amount. If you don’t take a distribution of the amount plus earnings by the due date, including extensions, of the year the contributions were made, you will have to pay a tax penalty in addition to ordinary income taxes.
- You must file form 8889 with your Federal income tax return for each year you contribute to or withdraw from your HSA account.
- The University will pay the administration/bank fees for active employees currently contributing to the HSA. If the employee terminates, retires, or discontinues contributions to the HSA, the employee will be charged for fees if applicable.
- The balance in your HSA account can be rolled over to another HSA custodian at any time.