Health Savings Account (HSA) FAQ

  • What is a Health Savings Account (HSA)?

    Health Savings Accounts (HSAs) are tax-advantaged medical savings accounts available employees who are enrolled in a High Deductible Health Plan (HDHP). HSAs are owned by the individual employee.  HSA funds roll over and accumulate year over year if not spent, with the ability to earn tax-free interest on the account. HSA funds may be used to pay for qualified medical expenses at any time without federal tax liability.

     

    How do I view my HSA balance?

    Log into your Independence Blue Cross (IBC) portal, at www.ibx.com.  Your spending account balance will appear on your home screen.  For additional spending account details, click Claims & Spending, Spending Accounts, Manage HSA.

    Please see the HSA User guide - updated 7.1.20.pdf for additional information

     

    How do I get a replacement card for one lost or misplaced?

    Contact Spending Account Member Services at 1-833-283-7694, or log into your IBX.com account, click Claims & Spending tab, click Spending Accounts, on the Overview Tab, click Manage the Debit Cards button, and click the Report Lost/Stolen hyperlink to request a new card.

     

    Can I adjust my HSA payroll contributions during the plan year?

    Yes, you can adjust your HSA contributions at any time during the plan year, either thru BenefitSolver or by submitting a paper form.

    To make the change in Benefitsolver, please see the tutorial How to Adjust HSA Contribution Mid-Year: https://www.iorad.com/player/1911324/BenefitSolver---How-to-Adjust-HSA-Contribution-Mid-Year?iframeHash=watchsteps-1

    Or submit a paper HSA Change request form to the Benefits Office: HSA Change Form generic.pdf

    The change will be reflected in the next payroll cycle.

     

    Can I make a one-time deposit?

    Yes, you can make a one-time deposit via payroll contribution by completing the HSA Change Request Form and submitting it to the Benefits Office.  The form should include a notation that the request is a one-time only deposit.

    How much can I contribute to my HSA?

    The IRS sets annual contribution limits each year.  In addition, individuals over the age of 55 are allowed to make additional “catch-up” contributions to their HSA.  The catch-up amount is an additional $1,000 over the IRS limits.  Your annual HSA limit will be shown when you log in to BenefitSolver and navigate to the HSA section.

     

    How to I access the annual tax forms related to my HSA?

    As a participant in an HSA account, you could receive two tax forms each calendar year from Independence Blue Cross (IBC).

    Form 1099-SA reports calendar year distributions from your HSA account.  If you did not use the account in the calendar year, you will not receive this form.  The due date for this form to be available on your IBC spending account portal is 1/31 for the previous calendar year.

    Form 5498-SA reports calendar year contributions to your HSA account.  The due date for this form to be available on your IBC spending account portal is May 31 for the previous calendar year.

    See this link for screen shots to access forms from your IBX portal:

    filedownload.ashx (wcasd.net)

     

    What happens to my HSA if I leave WCASD or change to a traditional health plan?

    Your HSA funds are never lost due to changes in employment or health plan. If at some point you are no longer covered by the district’s HDHP plan, you still have access to your funds and can use them to pay for qualified medical expense.  However, you are no longer eligible to make payroll contributions to the HSA.

    Approximately 1-2 months after leaving the district or changing health plans, your HSA account will transition to an “Individual” HSA and you will receive a new debit card. See Individual Accounts HSA\PNC Individual Account (PNC Retail) Account Holder Summary Handout (002).pdf for additional information.

    During the time you were enrolled in a HDHP medical/Rx plan through WCASD, the district paid the monthly bank fee on your behalf.  Once you transition from the HDHP plan or from the district, the district will no longer pay the associated monthly bank fee of approximately $5/month, and you will see the fee deducted from your balance each month.

     

    Do I have to use the money in my HSA to pay for expenses that are applied toward my deductible?

    No, it is your choice whether you want to use the money in your HSA or not to pay for medical and/or prescription drug expenses while working toward the deductible.  Some people prefer to use another form of payment to pay for medical and/or prescription claims and to build up their HSA account for their future healthcare needs. 

    Does the money in my HSA earn interest?

    Yes, your HSA account will earn interest because it is held in an interest-bearing account. Also, interest earned is tax free. HSA accounts calculate, compound and credit interest monthly based on applicable rate of the account balance.

     

    What can I use the money in the HSA for?

    You can use your HSA to pay for any qualified medical expense for yourself, your spouse and any dependents you claim on your tax return. 

     

    What is a qualified medical expense?

    Qualified medical expenses are those medical expenses that the IRS has approved for use with HSA accounts.  The IRS describes these expenses in their Publication 502: IRS Publication 502 2021.pdf

     

    Are dental and vision care considered qualified medical expenses?

    Yes, most dental and vision care expenses are qualified expenses.  For example, Lasik eye surgery, glasses, contacts and braces are qualified expenses.  Cosmetic procedures (such as cosmetic dentistry) are not generally considered qualified medical expenses.  However, dental and vision expenses do not apply toward your annual HDHP medical/Rx deductible.

     

    Can I use my HSA funds to pay an expense that isn’t “IRS Qualified”?

    If you pay for an ineligible expense, you must report it in your annual income tax filing and pay the related income taxes, plus a tax penalty. (After age 65, the penalty does not apply.)

     

    Can the unused funds in my HSA be rolled over each year?

    Yes, your funds will accumulate year over year and there is no maximum.  However, the annual limit you can contribute each year to the HSA may not exceed the maximum contribution amount set by the IRS, plus “catch up” contributions for those ages 55 and older.

     

    Can the money in the HSA be invested?

    Yes, you can invest the money held in your HSA.  There are a number of different investment funds that you can choose from, and you can do all of your investing directly from the Independence Blue Cross (IBC) website, www.ibx.com    Once your HSA balance reaches $501.00 you can begin investing in the optional HSA Investment Account.  However, it is recommended that you retain the amount needed for your deductible in your regular HSA account.

    If I choose not to invest my HSA monies, will it earn interest just sitting in the account?

    Yes, your account will still earn interest because it is held in an interest-bearing account.

    I’m age 65 or older and have also enrolled in Medicare.  Can I continue to contribute to my HSA after I enroll in Medicare?

    Once you enroll in Medicare, you are no longer eligible to contribute to your HSA or receive the district’s contribution.  Please notify the Benefits Office if you have enrolled in either Medicare Part A, Part B or both.

    My spouse is enrolled in Medicare but I am not. Can I still make contributions to my HSA?

    Yes, as long as you, the HSA holder, are not enrolled in Medicare, then you can continue to make contributions to your HSA up to the annual limits.

    Can I use my HSA for a spouse’s expenses?

    You can use your HSA to cover qualified medical expenses for you, your spouse, and any dependent children included on your income tax return.

    Do I need to submit receipts for my HSA expenses?

    No. You do not need to submit any receipts to us or file any claims. Just be sure to use the money for IRS-qualified medical expenses and save your receipts for tax purposes.

    What happens to my HSA at my death?

    At your death, the HSA will pass to your surviving spouse or named beneficiary tax free.