Health Savings Account (HSA) FAQ

General

An HSA is an Associate-owned savings account available to those enrolled in a qualified Consumer Driven Health Plan (CDHP). HSAs are designed to help you save for qualified medical and retiree health expenses, and can be used to pay for current and future qualified medical expenses for certain eligible individuals including you, your spouse, and your tax dependents. All medical plans offered by HBC are qualified CDHPs. You cannot open an HSA without being enrolled in such plan.
Yes, you can receive triple tax free savings through an HSA because contributions:
  • are pre-taxable
  • grow tax-free, and
  • can be withdrawn tax-free when used to pay for qualified medical expenses.
You will be automatically enrolled in an HSA at HSA Bank when you enroll in an HBC medical benefit plan. To start making contributions to your HSA account from payroll, or to change your per-pay contribution amount, contact the HBC Benefits Center at 1-800-498-8705.
Log onto www.mycigna.com. From the top menu bar select ‘Review My Coverage’ then choose ‘Health Savings Account (HSA).’ You will see your account balance in the top left corner and may choose to further click on “Visit HSA Bank to manage your account.” You may also log-in to the myCigna app for all of your health plan and HSA information on the go.

Eligibility

You are eligible to open an HSA if you are enrolled in a qualified CDHP medical plan, such as those offered by HBC. You must also meet the following requirements:

  • You cannot be covered under a non-qualified medical plan (i.e., a spouse’s/parent’s HMO or PPO that is not a qualified CDHP).
  • You cannot be enrolled in Medicare, including Part A.
  • You are not eligible to be claimed as a dependent on another person’s tax return.
  • You are not covered by a general-purpose health care flexible spending account (FSA) or health reimbursement account (HRA). Alternative plan designs, such as a limited purpose FSA or HRA, might be permitted.
  • You do not receive health benefits under TRICARE.
  • You have NOT received medical services at a VA (Veteran Affairs) hospital/facility in the last three months. Receipt of VA financial compensation (e.g., disability benefits) does not disqualify you from opening/contributing to an HSA.
You would be eligible for an HSA if you are:

  • not covered under your spouse’s or domestic partner’s plan
  • covered under your spouse’s or domestic partner’s plan, and that plan is also a HSA-qualifying CDHP
You cannot have an HSA if your spouse's FSA or HRA can pay for any of your medical expenses before your CDHP deductible is met.
In general, you must be a United States citizen, green card holder, or a United States resident to participate. As long as you have a verifiable United States residential address and pass the account set-up vetting process, you can establish an account.
To re-open an account that has been closed by HSA Bank, you must complete a new Application Form and send it to the address or fax number on the top of the form with all required documentation. If you received a refund check from HSA Bank for your deposits, you can include that check, or a check for the same amount, to re-deposit those funds to your account. Please call HSA Bank with any questions about this application process. Click here to access the HSA Application and Eligibility Form.

Contributions

In addition to yourself, your employer, friends and family may contribute to your HSA. Contributions from ALL sources count towards the annual IRS contribution maximum and any tax benefits apply to you. Be sure to consult IRS guidelines regarding tax implications.
HSA contribution limits are set by the IRS and may change from year to year. The combined contribution limits from all sources (yourself, employer, friends, and family) are listed in the table below. There is no annual required minimum contribution amount.


Medical Plan Election Coverage Tier 2020 Contribution Maximum
(Excluding Catch-up)
2020 Contribution Maximum
(Including Catch-up for 55+*)
Associate only coverage $3,550 $4,550
Associate + Spouse/Domestic Partner, Associate + Child(ren) or Family coverage $7,100 $8,100
This feature allows Associates who are age 55 and older (or in the year they turn age 55) the ability to make an additional $1,000 HSA contribution each year in addition to the annual maximum. Note: If a spouse is also at least age 55 (or will be during 2019), he/she cannot contribute their catch-up contribution to your HSA. However, if he/she is eligible to open an HSA, he/she can do so and contribute catch-up contributions to that account.
Yes, you can change your per-pay contribution amount by contacting the HBC Benefits Center at 1-800-498-8705.
Yes, you are allowed to contribute the maximum amount set by the IRS during the calendar year in which you first join, but you must remain enrolled in a qualifying CDHP Medical Plan until December 31 of the following year to retain the tax benefit. This is because the annual contributions are prorated on a monthly basis, otherwise you may be subject to an excess contribution or the excess contributions will be included in your gross income. An additional tax of 10% will apply to the excess contributions.
Yes, if you contribute more than the allowable amount to your HSA you will have to count the extra amount as taxable income and pay a 6% excise tax.
Yes. For the 2020 plan year, HBC is making up to the following contribution amount:

  • Automatic deposit into your HSA if you enroll in the Silver CDHP:
    • Up to $250 lump sum – Associate only coverage
    • Up to $500 lump sum – Associate + Spouse/DP; Associate + Child(ren); Family coverage

  • Wellness Incentives: an additional HSA contribution is given if you are enrolled in the Silver, or Bronze CDHP and complete a session with ALEX, an annual physical exam and online Health Risk Assessment are completed:
    • Up to $250 – Associate only coverage
    • Up to $500 – Associate + Spouse/DP; Associate + Child(ren); Family coverage and both you and your Spouse/DP complete wellness requirements

  • The Wellness Incentive will be awarded on an individual basis (independent of Associate/Spouse requirement completion).

NOTE: HSA and Wellness Incentive contributions may be prorated based on date of eligibility or Wellness requirement completion. Associates and/or spouses/domestic partners must complete a Health Assessment and an annual exam to be eligible for the Wellness Incentive. If you cover a spouse/domestic partner on an HBC medical plan, you can both complete the requirements on an individual basis to be eligible for the Wellness Incentive, independent of one another. HBC HSA contributions are only available to Associates enrolled in the Gold or Silver medical plan. Wellness Incentive HSA contributions are available to Associates enrolled in the Gold, Silver, or Bronze plan.

Yes. HBC’s Associate per-pay deductions for HSA contributions are structured so your annual contribution will not exceed the IRS contribution limits. You may, however, elect to override these per-pay limits and make payroll-deducted HSA contributions that are in excess of the per-pay limits. If you choose to make such higher contributions, you will be responsible to make certain your contributions do not exceed the IRS-imposed limits. If you wish to override HBC’s per-pay period contribution limits, you may do so by calling HBC’s Benefits Service Center at 1-800-498-8705. All HSA contributions that exceed the per-pay limits must be confirmed by fax or email to HBC’s Benefits Service Center by the form provided. You may also make additional contributions directly to your account custodian, HSA Bank. Direct contributions will be tax-deductible (up to IRS limits) on your federal tax return. Please note that HBC and its benefit partners will not be responsible if you make excess HSA contributions during the year, so please plan your HSA contributions accordingly.
Yes. Generally, you are able to transfer or rollover funds from an HSA (or MSA) with another custodian to your current HSA at HSA Bank. You are limited to one rollover per twelve month period and the rollover must be completed within 60 days. For more information and step-by-step instructions regarding each process, click here.
As long as you have not enrolled in Medicare Part A or B you may be eligible, provided you meet all other provisions (not covered by a spouse non-qualifying plan, eligible to open an account, etc.). Once you enroll in Medicare, you may no longer contribute to your HSA. For most individuals, this means you will no longer be eligible when you turn 65. You lose eligibility as of the first day of the month you turn 65. For example, if you turn 65 on July 21, you are no longer eligible to contribute to your HSA as of July 1. Your maximum contribution for that year is the sum of 1/12 of your applicable annual limit (remember to include the catch-up amount in the federal limit) times the number of months you were eligible.

Wellness Incentive HSA Contributions

Associates enrolled in the Platinum, Silver, or Bronze medical plans are eligible for the Wellness Incentive contribution. You must complete a session with ALEX, the Cigna Health Risk Assessment and an annual physical exam in order to receive the Wellness Incentive contribution. PPO Wellness Incentives are contributed to a General Purpose Health Care FSA.

NOTE: Your full annual physical exam must be with your regular personal physician. An annual well woman visit with an OB/GYN will count toward meeting the requirement. Quick visits to a “minute clinic” or similar facility will not count toward meeting the requirement.

The Health Assessment will be available in your myCigna account. Both the Health Risk Assessment and an annual physical exam (at a network provider) may be completed at no cost to Associates. The full amount of the Wellness Incentive can be earned if you and/or your spouse/domestic partner complete the requirements on or before June 30, 2020. For more information, including the HSA Contribution Proration Schedule, visit the HBC Wellness Incentive page.

NOTE: Wellness Incentive contributions are available to Gold, Silver or Bronze CDHP members. You may receive a prorated automatic employer contribution based on the month you are eligible for benefits. Depending on the completion date of both the Health Risk Assessment and the annual physical exam, your Wellness Incentive contribution amount may be prorated as well.

Expenses

Your HSA can be used to pay for qualified medical expenses defined by the IRS (Publication 502). Keep in mind that the qualified medical expenses can change from time to time and may be different than expenses eligible under HBC’s Medical Plan. HSA dollars used for non-qualified expenses are subject to tax and penalties – so be careful about ensuring your HSA is used for allowable expenses only. It is very important that you maintain receipts for ALL expenses you apply to your account. In the event of a tax audit – you will be required to show proof of qualified medical expenses.

Common allowable expenses include:

  • Doctor's office visits
  • Dental care and braces
  • Eyeglasses, contacts, and LASIK surgery
  • Prescription medications
  • Acupuncture
  • Chiropractic services
  • Doctor's office visits (non-preventive care)

Common expenses that are NOT allowable include:

  • Over-the-counter drugs (unless prescribed by a doctor)
  • Advance payment for future medical care
  • Amounts reimbursed from another source, such as a health plan or Health Plan FSA
  • Cosmetic surgery (unless due to trauma or disease)
  • Child care for a healthy baby
  • Funeral expenses
  • Health club dues
  • Weight loss programs not prescribed to treat a specific disease

For a complete list of allowable expenses and exclusions visit: Internal Revenue Service
Yes. If you do though, and are under age 65, you'll be taxed on the amount you use and assessed a 20% penalty. Once you're age 65, you'll be taxed for monies used for non-medical expenses, but won't pay a penalty.

Distributions

There are several ways you can access your account to pay for qualified medical expenses – including:

  • Link account to your Cigna medical plan so payment is automatic when there are eligible expenses
  • Use the HSA Bank debit card
  • Use the HSA Bank online bill payment service
  • Withdraw funds at an ATM using HSA Debit card
  • Write a check to yourself (for a fee, you may order checks through HSA Bank)
When using these methods, be sure to couple your withdrawal documentation with the receipt of the qualified expense.
No, not if the funds are used for qualified health expenses. If the funds are used for something that is not a qualified expense, you will be taxed on that amount.
Yes, however, if the funds are withdrawn for any expense other than a qualified medical expense, the IRS will impose a 20% penalty tax. After you reach age 65 you can withdraw the funds without penalty but the amounts withdrawn for non-medical expenses will be taxable as ordinary income. Please note, the HSA is a bank account, so you can only access up to the current balance of your HSA. If you do not have enough in your HSA to pay a bill, you have the option to pay out-of-pocket and then reimburse yourself for the expense from your HSA once the funds are available.
Yes, however any money used to pay for something other than eligible medical expenses will be taxed and subject to a 20% penalty. Exceptions to the 20% penalty include expenses paid after the account owner turns 65, is disabled, or dies.
Yes. If you do though, and are under age 65, you'll be taxed on the amount you use and assessed a 20% penalty. Once you're age 65, you'll be taxed for monies used for non-medical expenses, but won't pay a penalty.
The purpose of an HSA is to save money to pay for current and future medical costs. HSA’s are set up to be tax-advantaged accounts in order to help encourage people to contribute and save for medical costs. If funds are withdrawn for purposes other than medical before age 65, a 20% penalty is imposed. This penalty is imposed by the IRS to help deter use of this money for anything other than medical, similar to how a 401(k)/IRA is set up for retirement.
Yes, even if your spouse isn’t enrolled in an IRS-qualified CDHP, you may still use your HSA to pay for their qualified medical expenses.
You may use the HSA to cover qualifying medical expenses for your dependent children up to age 26, as long as he/she are considered dependent under Internal Revenue Code Section 152.
Yes. If your HSA is funded, you may use that money for qualified medical expenses inside and outside of the United States.
Yes, but it has a minimal interest rate. However, once you build up your account balance, you will be able to invest in mutual funds through a brokerage account.
Yes. To open an HSA investment account, you need to transfer a minimum of $2,000 from your cash account to the investment account. After the initial transfer of $2,000, this threshold does not need to be maintained in the investment account. In addition, there is no minimum that needs to be maintained in your cash account once you’ve opened the investment account.

Termination of Employment

The money in your HSA is yours to keep. You can continue to use it for qualified health expenses, and your account will remain open until you choose to close it. If you remain enrolled in a CDHP, either through a new employer, through HBC’s plan via COBRA, or through an individually-purchased insurance policy, then you will still be eligible to contribute to your HSA. However, if you have no coverage, or if you enroll in a health plan with a low deductible (non-HSA qualifying health plan), then you will no longer be eligible to contribute to your HSA.
Yes, COBRA premiums are considered eligible expenses.
Your eligibility to contribute to your health savings account (HSA) is not dependent on your employment status with HBC. You do, however, need to meet eligibility requirements (such as being enrolled in an IRS-qualified High Deductible Health Plan) in order to continue making HSA contributions.
Yes. If you are no longer employed by HBC you will be responsible to pay the monthly administration fee of $3.00 per month.
Yes, contact your new employer’s HSA provider to get instructions.
If you have a surviving spouse that is the named beneficiary of the HSA, the HSA will be treated as your spouse’s HSA when you die. If there is no surviving spouse or your spouse is not the named beneficiary, the account will cease to be an HSA and the funds will be included in the federal gross income of the estate or named beneficiary.