NOTE: Please be aware that your voluntary employee Health Savings Account (HSA) contributions were not taken during the month of May and also will not be taken from your pay during the months of June through August, 2017. 

Voluntary employee HSA contributions are deducted over 8 months in accordance with the academic year payroll. Your normal voluntary employee contributions will begin again with your September pay.

 You will continue to receive employer contributions from Purdue during these months as the employer contributions are equally divided over 12 calendar months.

 If you have any questions, please contact HR-Benefits at hr@purdue.edu or by phone at 765-494-2222.

FAQs for Purdue Health Plan Plus HSA 1 and Purdue Health Plan Plus HSA 2

These questions and answers are designed to give you the basic concepts of medical plans with health savings accounts. This Web page is not intended to provide all the information you need to make a decision on whether or not an HSA is right for you. You may want to consult with a tax advisor.

Purdue Health Plan Plus HSA 1 and
Purdue Health Plan Plus HSA 2

HSA Basics and Contributions

Using the HSA and Limited Purpose FSA

Eligibility for HSA

Purdue Health Plan Plus HSA 1 and Purdue Health Plan
Plus HSA 2

What defines a “family” for these plans?

For a plan to be qualified for a health savings account, the IRS defines that a family is an employee plus one or more dependents. There will still be different premiums for the coverage levels of employee, employee + spouse, employee + child(ren), and employee + family.

If I have a “family” deductible on these plans, what is my individual deductible?

The family deductible on these plans does not have an individual deductible embedded. The entire family deductible must be met before co-insurance applies to the treatment for any one person. It is possible for one individual person to meet the entire family deductible.

Why are the deductibles in these plans so high?

The IRS determines the minimum deductible for HSA-qualified medical plans, and they are adjusted annually. Purdue has two options that meet the IRS rules. 

How are prescription drugs covered under these plans?

Generic preventive medications are covered at 100 percent by the plans.

If the prescription is not a generic preventive, you will pay full discounted cost of that medication until the deductible is met. After you meet the deductible, you share in the cost, depending on the tier of Generic/Preferred Brand/Non-Preferred Brand until your out-of-pocket maximum is reached.

Who determines which medications are considered preventive?

Express Scripts reviewed the legislation that authorizes HSA-based medical plans, as well as the published IRS guidance and US Treasury directives in order to develop the list of drugs classified as preventative prescription medications.

For more information on the IRS guidance, please see the IRS Web site. The preventive medication list cannot be appealed to include additional categories of medication.

What does Anthem consider to be “preventive” medical care?

Your doctor will determine the preventive tests and treatment that is appropriate for you based on your age, gender and family history. Anthem has a list of services that are commonly provided as preventive care; however this list is not comprehensive. Be sure to discuss the preventive care benefits with your doctor to ensure that you are getting the best preventive medical care possible. Preventive care does not include any service or benefit intended to treat an existing illness, injury, or condition.

HSA Basics and Contributions

What is the Health Savings Account (HSA)?

The HSA is a bank account with a triple tax advantage that you will own. Contributions to the account are pre-tax, withdrawals from the account are tax-free so long as the funds are used on eligible health care expenses, and should you choose to open an investment account after you’ve reached a certain balance, your investment growth and interest are tax-exempt (See question What is the interest rate for the HSA, and what are my investment options?)

Upon your enrollment, PayFlex will open this account in your name and Purdue will pay the monthly maintenance fee while you are receiving employer contributions to it.  After your HSA is established with Purdue, if you stop your employer contributions to it (by declining the account for whatever reason), it will become a retail account and you will be responsible for the monthly maintenance fee.  PayFlex will contact you with a mailing detailing the changes that take place when this happens.

To receive contributions to an HSA, one of the eligibility requirements states you must be enrolled in a high-deductible medical plan, such as the Purdue Health Plan Plus HSA 1 or the Purdue Health Plan Plus HSA 2. The account allows you to put money aside and reimburse yourself for medical expenses on a tax-free basis.

Purdue will make non-taxed, incremental contributions to your HSA in conjunction with your pay schedule, and you have the option of making pre-tax contributions to it via payroll deduction. Again, the funds in that account, including the contributions from Purdue, are yours to use tax-free on eligible health care expenses. Unspent funds roll over from year-to-year (there's no “use it or lose it” rule as with Flexible Spending Accounts) and even follow you if you ultimately leave the university (distribution rules still apply to the funds).

To help determine your HSA eligibility, please our HSA Interactive Guide


How will Purdue make contributions to my HSA, and how can I make contributions?

Purdue will make a contribution to your HSA each pay period. You may also make pre-tax contributions to your HSA through payroll deduction; the amount you elect during open enrollment is divided equally over each pay period. You may change your contribution at any time throughout the year. Go to the Purdue Employee Portal, click the Benefitfocus link and log on with your Purdue career account username and password to make a change.

How much can I contribute to my HSA?

The IRS has a statutory limit on the annual amount that can be contributed to an HSA. For 2017, an individual can have HSA contributions up to $3,400, and a family can have HSA contributions up to $6,750. For 2016, an individual can have HSA contributions up to $3,350, and a family can have HSA contributions up to $6,750.

The annual limits include both Purdue's contributions and your own contributions. It's your responsibility to be sure your combined contributions do not exceed IRS limits.

If you are age 55 or older, you can also make an additional “catch-up” contribution of $1,000 on an annual basis. If you are turning age 55 at any time during the plan year, you may still make the full catch-up contribution.

How much can I roll over from year-to-year in my HSA?

While there is maximum limit to the amount that you can contribute to your HSA on an annual basis, there is no maximum amount that you can roll over in your account, so you can continue to build up contributions and interest over time if that is your goal.

If both spouses have coverage through the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2 (or another employer's HSA-qualified medical plan), how much can each spouse contribute to their HSA?

If both individuals have single coverage, they can each contribute the 2017 single contribution maximum, which is $3,400, or a total of $6,800. If one or both of the spouses have children covered as dependents, then the combined contributions to the HSAs by husband and wife cannot exceed the family contribution maximum ($6,750 for 2017) and should be divided between them by agreement.

What is the interest rate for the HSA, and what are my investment options?

The interest rate for the HSA is similar to other savings accounts. If you reach a $1,000 balance in your HSA, you can transfer the funds to an investment account at PayFlex with several different options to invest your money. Details about the HSA investment funds will be available through your member account at PayFlex HealthHub if you elect a medical plan with an HSA.

If you choose to participate in the PayFlex investment options, you will be responsible for the monthly account management fee that is associated, and that amount will be deducted directly from your HSA.

Can I lose money with the investment account options associated with the HSA?

The investment accounts are based on a variety of risk-based investments such as money market or stock funds, so there is the possibility that those investments could lose value.

Will I need to do anything to open my health savings account at PayFlex?

After open enrollment, PayFlex will initiate the bank account opening process. Generally, you will not need to take any steps; however in some cases, PayFlex may need to contact you to verify information such as your street address, if you use a PO Box.

How do I roll my MSA or HSA from another bank into my HSA with PayFlex?

You can access a rollover form from HealthHub or by calling Customer Service at the number on the back of your debit card to transfer funds from a health savings account ( HSA) or medical savings account (MSA) held at another institution. After completing the form, you must send it to your current MSA/HSA custodian; the form will serve as your instructions to transfer the HSA/MSA funds into your new account.

Is the HSA account insured?

The HSA cash account offered through PayFlex is an FDIC insured account. The investment account is not federally insured.

Can I transfer funds from my FSA (or HRA) to an HSA?

No.

What is the monthly account maintenance fee and when would I be responsible to pay it?

The monthly account maintenance fee is PayFlex’s fee for administering your HSA (similar to a bank account fee).  While you are receiving employer contributions to your HSA, Purdue pays this fee on your behalf.  If you stop your employer contributions to your HSA (by declining the account due to loss of eligibility or changing to the non-high deductible medical plan, for example), the HSA will become a retail account and you will be responsible for paying the monthly account maintenance fee.  PayFlex will mail you a letter with more information when your HSA becomes a retail account.

Using the HSA and Limited Purpose FSA

What can I use my health savings account for?

You can use the funds in your HSA to pay for any medical or pharmacy expenses (such as your deductible and coinsurance), as well as dental expenses, vision expenses and qualified over-the-counter products. To view a list of eligible expenses, log on to HealthHub and under My HealthHub Resources IRS Resources. 

Can HSA money be used to pay insurance premiums?

Insurance premiums are considered eligible medical expenses for an HSA in the following situations:  COBRA continuation of health care coverage; health care coverage while receiving unemployment compensation; long-term care coverage (up to the annual amount allowed by age); and for those age 65 and older, Medicare health care coverage including Medicare Parts A, B and D.

Health insurance premiums for coverage offered through an employer and premiums for Medicare supplemental plans, such as Medigap are not considered eligible medical expenses. View IRS Publication 969 for more information regarding insurance premiums as qualified medical expenses.

What happens if I use the money in the HSA for a purchase that is not a qualified expense?

Using your funds for something other than what are qualified eligible health care expenses may result in a 20% tax penalty on any amount used and you will have to pay taxes on that amount.  At age 65, the tax penalty would not apply, but you’d still have to pay taxes on the amount used on non-eligible expenses.  Consult a tax advisor for more details.

Do I have to fill out any claim forms?

No. You are responsible for ensuring that your purchases using your HSA funds are qualified, and therefore, should familiarize yourself with what qualified medical expenses are (see above). Also, keep your insurance explanations of benefits (EOBs) and detailed receipts in case you need to defend your expenditures or decisions during an IRS audit.

What kind of forms will I need for my taxes if I have an HSA?

If you enroll in a plan with an HSA, you will need to fill out IRS form 8889 when you complete your taxes on an annual basis. Be sure to discuss this with your tax preparer. Additional information about IRS forms and publications about HSAs can be found on the Dept. of Treasury Web site.

You will receive a 1099 form which shows the total distributions from your HSA account to assist with year-end tax preparation.

How can I access the money in my HSA?

PayFlex will issue you a debit card for your HSA (up to two cards, if you have family coverage) that you will be able to use when paying bills by mail or swipe at your provider's office, pharmacy, etc. You will also be able to transfer funds to a linked bank account using your employee account on HealthHub. You can also set up recurring payments to a health care provider.

How do I order a replacement or additional PayFlex debit card(s)?

To order a PayFlex debit card for yourself or a dependent, call PayFlex directly at 1-888-879-1454 or log into your PayFlex account at www.purdue.healthhub.com and select Manage My Debit Card(s).

With an FSA, I can access all of the funds I elect to contribute for that year immediately on January 1; does an HSA work the same way?

No, with an HSA you can only access the funds that are actually in your account at that time. That includes the Purdue contributions that are made to your account; you will only be able to use those funds after they have been deposited in your HSA. If you incur out-of-pocket expenses and do not have funds available in your HSA to cover those costs, you can reimburse yourself for when the funds are deposited in your HSA after each pay cycle. You may access the funds using one of the methods described in the questions above.

Can I still have a flexible spending account if I choose a medical plan with an HSA?

If you choose a medical plan with an HSA, you may not have a Health Care FSA which can be used on eligible medical, prescription, vision, and dental expenses, but you may have a Limited Purpose FSA. Limited Purpose FSA funds may be used on eligible vision and dental expenses only. Having a Dependent Care FSA does not affect your HSA eligibility.

If I can use my HSA to pay for dental and vision expenses, why would I need to have a limited purpose FSA?

Many people may not need to participate in a limited purpose FSA if they utilize the funds in their HSA to pay for dental and vision expenses. Keep in mind that the dental and vision expenses do not apply to the deductible and coinsurance for your medical plan, and the amount of money that you can contribute to the HSA on an annual basis is limited. Therefore, if you have significant dental or vision expenses and use the funds in the HSA to pay for those items, you may exhaust your HSA funds and not have them available for use to pay for medical costs that make up your deductible and coinsurance. If you're planning on having significant dental work or vision costs, such as braces or lasik eye surgery, you may want to consider putting some funds into a limited purpose FSA to pay for those services. Limited purpose FSA funds are available on January 1.

My spouse and/or children have another form of medical insurance, and those plans are not HSA-qualified plans. Can I choose a Purdue plan with an HSA and pay for the medical expenses of my dependents not covered by my medical plan?

Yes, the qualified medical expenses for IRS-qualifed dependents can be reimbursed from your HSA, even if that dependent has other non-HSA qualified medical coverage. Those expenses for dependents not covered under your medical plan do not apply to the deductible and coinsurance for your Purdue medical plan.

Can I have an HSA if my spouse has a general purpose FSA for health care through his/her medical plan?

No, you are not eligible to participate in an HSA if your spouse has a general purpose FSA. Either you may not choose the medical plan with an HSA, or your spouse must not elect to participate in the FSA program through his/her medical plan.

Where can I learn more about how health savings accounts operate?

The IRS regulates the requirements for health plans to eligible for an HSA, and the rules associated with owning an HSA. There is also an extensive FAQ about health savings accounts on the Department of Treasury Web site.

Eligibility for HSA

Can I be covered by my spouse's medical insurance at another employer and choose a medical plan with an HSA?

The answer in most cases is no. To be eligible for a health savings account, an individual must be covered by a HSA-qualified Health Plan and must not be covered by other health insurance that is not defined by the IRS as a “high deductible health plan.” If the other medical plan is an HSA-qualified plan, you may have dual coverage under both plans. If you are covered by another medical plan that is not qualified for an HSA, you may enroll in a high deductible health plan, but not participate in an HSA or receive the associated Purdue contributions.

I'm on Medicare (or TRICARE or VEBA), can I have an HSA?

You are not eligible for an HSA after you have enrolled in Medicare or TRICARE or VEBA or if you have received health benefits from the Veterans Administration for a non-service-connected disability within the past three months.  If you had an HSA before you enrolled in Medicare, you can keep it. However, you cannot continue to make contributions to an HSA after you enroll in Medicare. You may enroll in a high deductible health plan, but not participate in an HSA and or receive the associated Purdue contributions.

My spouse or children have another form of medical insurance, and those plans are not HSA-qualified plans. Can I choose a medical plan with an HSA and cover my dependents as secondary coverage to their current insurance?

Yes, dependents can be covered under a medical plan with an HSA as secondary coverage, even if that dependent has other non-HSA qualified coverage, and it does not impact the employee's eligibility for the HSA plan. The Purdue medical plan with an HSA will always pay last after the other medical plans have calculated the amounts they will pay.

I'm on COBRA, can I have an HSA?

If you are an employee who has an HSA-Qualified medical plan, and you terminate employment, you will still retain possession of your HSA account, and can use those funds tax-free on qualified health care expenses, including your COBRA premiums. However you will no longer receive contributions from Purdue for the HSA account. If you choose COBRA, you may enroll in a high deductible health plan that is identical to the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, but does not include an HSA and the associated Purdue contributions.

Can I switch medical plans to or from a medical plan with an HSA during the year?

No, you may not switch your medical plan choices during the plan year, even if you have a change in family status. You can change the amount you contribute to an HSA at any time.

What happens if I lose my HSA eligibility?

After your HSA is established with Purdue, if you lose your eligibility to receive contributions to it, you must decline the account in order to stop your employer contributions.  Your HSA will become a retail account and you will be responsible for the monthly account maintenance fee.  PayFlex will mail you a letter with more information when your HSA becomes a retail account.  Your HSA funds will remain yours and you can still use them tax-free on eligible expenses.

To help determine your HSA eligibility, please our HSA Interactive Guide.

See question What is the monthly account maintenance fee and when would I be responsible to pay it?

What happens if I no longer am enrolled in a high-deductible medical plan?

If you are no longer covered by an HSA-qualified medical plan such as the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, you will lose your eligibility to make or receive contributions to your HSA account and you will be responsible for the monthly account maintenance fee.  Your HSA funds will remain yours and you can still use them tax-free on eligible expenses. See question What happens if I lose my HSA eligibility?

What happens if I terminate my employment with Purdue?

If you are no longer working at Purdue at age 65, you are not eligible to contribute to and/or receive contributions to your HSA.  Your HSA will become a retail account and you will be responsible for the monthly account maintenance fee.  PayFlex will mail you a letter with more information when your HSA becomes a retail account.  Your HSA funds will remain yours and you can still use them tax-free on eligible expenses.  See What happens if I lose my HSA eligibility?

What happens to my HSA when I reach age 65?

One you are 65, you may use your HSA funds on Medicare premiums (excluding Medigap).

At 65, if you use or withdraw your HSA funds for non-eligible health care expenses, you will not be subject to the 20% tax penalty, but will be responsible for paying taxes on the amount spent.

If you are still working at Purdue at age 65 and have not enrolled in Medicare, you may continue to contribute to and/or receive employer contributions to your HSA.  Please note, if plan to draw benefits from Social Security, you will be required to enroll in Medicare Part A and would no longer be eligible to contribute to and/or receive employer contributions to your HSA.  See What happens if I lose my HSA eligibility?

If you are no longer working at Purdue at age 65, you are not eligible to contribute to and/or receive contributions to your HSA.  See What happens if I lose my HSA eligibility?

What happens to my HSA if I die?

If you are married, your spouse may become the owner of the account and can use it as his/her HSA. Another option is that the account may no longer be treated as an HSA, and will be passed along to your beneficiary or become part of your estate. For specific details on this subject, consult a tax advisor or estate attorney.

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