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Purdue HSA Medical Plans

Employees who elect any of Purdue's Consumer-Driven Health Plans (CDHP) — Premier, Standard, or Limited — may be eligible to participate in an HSA — a bank account set up in the employee's name to which Purdue contributes funds that may be used for eligible medical, prescription, vision, and dental expenses incurred by the accountholder as well as their eligible dependents (e.g., spouse, IRS-qualifying child — one they can claim on their taxes) during their HSA coverage period.

HSAs offer a triple-tax benefit:

  1. You can contribute to them on a pre-tax basis (lowering your taxable income).
  2. Your balance grows tax-free interest over time as it is a true savings account.
  3. You can make tax-free withdrawals and distributions to cover qualified medical expenses.

These funds roll over from year to year with no limit and the account follows the accountholder, even if they leave Purdue employment. Once a certain balance is reached, funds may be invested. Additional benefits to having an HSA are summarized here, in "The Anatomy of an HSA".

Are you eligible for an HSA?

Enrollment into a Purdue CDHP does not guarantee your eligibility for an HSA - there are additional IRS rules which may impact you. To get individualized guidance through these rules, please use our Interactive HSA Tool.

You may also refer to a quick HSA Eligibility Checklist.

Employees who are already 65 or who will turn 65 during the plan year should note that special rules apply to anyone who draws Social Security benefits and/or is covered by Medicare. Please take a few minutes to watch this video which walks you through your choices and what they mean for your Purdue health coverage and HSA, Thinking about Medicare?

Note: The information from the Interactive HSA Tool does not constitute tax or legal advice. If you have specific questions about the implications of an HSA for yourself, you are encouraged to seek professional tax or legal counsel.

If you are not eligible for an HSA, this does not impact your ability to enroll into a Purdue CDHP — only into an HSA. Purdue offers Health Reimbursement Arrangements (HRA) for those who are not eligible for an HSA for any reason.

Customer Identification Program (CIP)

Before you can access your HSA funds, HSA Bank is required to validate your identity through a Customer Identification Program, or CIP, process (all banks are required by federal regulation to do this when a person is attempting to open an account). 

Typically, your identity is verified with no issues.  Occasionally, however, more information is needed to further verify your identity. Most often this occurs when there has been a recent change in your name or address. In this case, HSA Bank will reach out up to three times to request two unique forms of identification which must come directly from you.  This documentation can be submitted to HSA by mail, fax, or by uploading to their secure website.  The details of what is needed and where to send it will be found in the letters from HSA Bank if you fail the CIP process or you can call HSA Bank using the number on the left side of the page.

You will not be able to access your HSA funds until you have pass the CIP process.  Additionally, if the requested documentation is not received by HSA Bank within 60 days, your account will be closed and any contributions made to it will be returned over time (based on the contribution date), less taxes.  If this happens, you will need to take extra steps to reopen the account, must pass CIP, and any missed contributions from Purdue would only apply going forward, beginning with the date the account is reopened.  Questions should be directed to HSA Bank at 1-800-357-6246.

Their first validation begins with a physical residential address; therefore, if you've only listed a P.O. Box address in our system, you will need to update your address before your account can be opened.

HSA Contributions & Contribution Limits

The contributions and limits shown below assume you are eligible for the HSA all year. If not, the amounts would be prorated. Changing plan tiers midyear (i.e., from family to individual) will also impact your contributions and limits.

Purdue Base Contributions

Purdue will make contributions to your HSA based on your medical plan enrollment. Typically, this is done incrementally in conjunction with your pay schedule — monthly (for fiscal or academic year pay schedules) or bi-weekly, and academic-year staff do not receive contributions in the months of May through August when they don't receive full pays; however, for 2021, Purdue will make a one-time base contribution in full to your HSA. This is to ease the transition for those who are migrating away from the PPO Plan (Purdue Health Plan) to a CDHP; however, everyone who participates in an HSA in 2021 will receive the upfront payment. 

Note: For those enrolling in an HSA midyear, these contributions will be prorated based on your remaining number of pays in the year. 

The following amounts will be reflected in the "HSA Savings ER" line under the "Purdue-Paid Benefits" section of each of your pay statements:

  • $325 for employee-only coverage
  • $650 for family coverage (employee + one or more)

Learn how you can earn additional HSA funds through our Healthy Boiler program.

Optional Employee Contributions

You can elect to set aside dollars on a pre-tax basis through payroll deductions for your HSA as long as the total combined contributions from any source (e.g., your deductions, Purdue base, Healthy Boiler wellness program) do not exceed the IRS contribution limits below. You are encouraged, but not required to make your own contributions to an HSA and may change your payroll deductions at any time during the plan year without a Qualifying Life Event (changes may take 1-2 pay periods to reflect on your paycheck).

IRS Contribution Limits

You are responsible for assuring that total contributions to your HSA from all sources combined do not exceed the limits below. As a reminder, these assume you are eligible for the HSA all year. If not, the amounts would be prorated. Changing plan tiers midyear (i.e., from family to individual) will also impact your limits. Your age may also affect your limits. See Catch-Up Contributions in the next section.

Spouse tip: If your spouse also receives or makes contributions to an HSA through Purdue or another employer, you must collectively adhere to the contribution maximum family limit.

  • 2021: $3,600 for employee-only coverage or $7,200 for family coverage

(employee + one or more)

  • 2020: $3,550 for employee-only coverage or $7,100 for family coverage

(employee + one or more)

Catch-up Contributions

Federal rules also allow what are called “catch-up” contributions to an HSA. If you are age 55 or older, or will turn 55 any time during the plan year (2020 or 2021), you may contribute an additional $1,000 above the IRS limits in the previous section. 

Spouse tip: Eligibility to make catch-up contributions is based on the accountholder's age — not on their spouse's age.

Account Management

For detailed instructions on managing your account online (e.g., check your balance, reimburse yourself for eligible expenses paid out-of-pocket, pay a bill, link your bank account) at www.hsabank.com, review HSA Bank's Member Website Guide. You may also access your account on the HSA Bank mobile app.

Interest and Investment Opportunities

Health Savings Accounts are interest-bearing accounts. With HSA Bank, you have the opportunity to potentially increase your funds by taking advantage of their investment options. For more information, please review HSA Bank Self-Directed Investment Options.

Tax Forms Information

HSA Bank tax forms will be made available online at www.hsabank.com from the “View Statements” link on the Message Center tab and you will receive an email from HSA Bank when they are posted. They will not be mailed out automatically unless you opt into receiving paper copies. To opt in, log into HSA Bank, scroll down to the “Quick Links” box, and click “Statement Preferences.” In the Statements section, place a checkmark under "Paper" in the HSA Tax Documents row. You may also call HSA Bank at 1-800-357-6246 to request a paper copy. Be sure to verify your address on file with Purdue is up to date first.

1099-SA

  • Posted by January 31
  • Reports funds distributions (You will not receive this form if you did not withdraw/spend funds from your HSA in the prior tax year)
  • Required to report on IRS form 8889 when filing tax return 

5498-SA

  • Posted in May
  • Reports contributions to your HSA made in the prior tax year along with your HSA balance as of the end of December in the prior tax year
  • Informational only and is not required to file with your tax return

Additional Resources

FAQ - Health Savings Account (HSA)

The IRS regulates the requirements for health plans to be eligible for an HSA and the rules associated with participating in/receiving contributions to an HSA. Enrollment into the Purdue Health Plan Plus HSA 1 or the Purdue Health Plan Plus HSA 2 does not guarantee your eligibility for an HSA and 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.

For specifics on the features and functions of managing your HSA online, please refer to the HSA Bank Member Website Guide.

Eligibility

To receive contributions to an HSA with Purdue, one requirement is enrollment inone of the Consumer-Driven Health Plans — Premier, Standard, or Limited. Additional rules around eligibility are complex. To help determine whether you may be eligible for an HSA, please use our Interactive HSA Tool.

After your HSA is established with Purdue, if you lose your eligibility to receive contributions to it mid-year, you must decline the account in order to stop your employer contributions. If you are losing eligibility by enrolling in a non-HSA-qualifying medical plan, you will not see the option to enroll in an HSA and therefore won't need to decline it.

In either case, your HSA will become a retail account (rather than an account connected with an employer) and you will become responsible for the monthly account maintenance fee. When this happens, you will receive a letter from HSA Bank regarding the change along with an updated Fee Schedule.

If you are no longer working at Purdue, you will not be able to make or receive pre-tax contributions to your HSA. Your HSA funds will remain yours to keep and you can still use them free of taxes and penalties, provided they are spent on eligible expenses. Your HSA will become a retail account and you will become responsible for the monthly account maintenance fee. When this happens, you will receive a letter from HSA Bank regarding the change along with an updated Fee Schedule.

The IRS prohibits individuals from participating in both an HSA and a health care FSA or HRA (allows reimbursement for eligible medical, prescription, vision, and dental expenses, like the HSA). The only FSAs Purdue offers which do not affect your HSA eligibility are Limited Purpose FSAs (eligible vision and dental expenses only) and Dependent Care FSAs (eligible childcare expenses only).

Spouses may not each enroll in an HSA and a health care FSA or HRA at the same time. Therefore, if your spouse is enrolled in a health care FSA or HRA, you would not be eligible to enroll in an HSA.

Account Basics and Contributions

Purdue partners with HSA Bank to administer our HSAs, FSAs, and HRAs. Get more information on HSA Bank.

An HSA is an FDIC insured bank account with a triple tax advantage in which eligible employees may participate. First, your contributions to the account are pre-tax, second, withdrawals and distributions from the account are tax-free when the funds are used properly, and third, interest earned on the funds in the account along with any growth and interest following investment is tax-exempt.

 

When you enroll in an HSA, Purdue will send your information to HSA Bank.

In order to open a bank account, HSA Bank is required by law to validate a person's identity. Their first validation begins with a physical residential address; therefore, if you've only listed a P.O. Box address in our system, you will need to update your address before your account can be opened.

Once your account is opened, the rest of your data is verified through HSA Bank's Customer Identification Program, or CIP, and your account is ready to receive contributions. Occasionally, however, more information is needed to further verify your identity. Most often this occurs when there has been a recent change in name or address. In this case, HSA Bank will reach out to request verifying documentation from you directly.

It is possible to incur fees with your HSA (e.g., by ordering additional debit cards after the first two, over-drafting). You can view a summary of these fees online through your HSA Bank account by logging into HSA Bank, clicking Resources from the menu bar, then clicking View Fee Schedule.

In 2021, Purdue will make a one-time base contribution in full to your HSA in January. Typically, this is done incrementally in conjunction with your pay schedule — monthly (for fiscal or academic year pay schedules) or bi-weekly, and academic-year staff do not receive contributions in the months of May through August when they don't receive full pays. The amount will be reflected in the "HSA Savings ER" line under the "Purdue-Paid Benefits" section of your pay statement.

During the annual open enrollment period in the fall, when electing an HSA, you will have the option to make your own contributions and can enter the annual amount you'd like to contribute. Purdue will divide that amount by your number of pays, deduct it incrementally from your pay before taxes, and submit those funds to HSA Bank for deposit.

The number of pays for a full year are as follows: 12 for the fiscal payroll schedule, 8 for the academic payroll schedule, and 26 for the bi-weekly payroll schedule. Those on the academic payroll schedule will not have HSA deductions taken the months of May and August.

You are encouraged to contribute to your HSA via payroll in order to maximize your tax benefits as that way you wouldn’t pay federal income or Social Security and Medicare payroll taxes; however, if you are unable to contribute via payroll or would prefer not to lower your IRS-reported taxable income which may impact your future Social Security benefits, you are allowed to make post-tax contributions to your account. This way you will get back federal income taxes when filing your taxes, but you will not get back the payroll taxes.

You have until the tax-filing deadline each year (4/15) to do one of the following:

    1. Complete the HSA Contribution Form for HSA Bank and mail it to them with a check. Note: Be sure to mark the appropriate contribution tax year. For example, if you are contributing to your 2020 account in 2021, you will check the box for Prior Year.
    2. If your HSA is linked with your personal bank account, you may do an electronic funds transfer. Instructions on electronic funds transfers and on linking a bank account to your HSA are found in the HSA Bank Member Website Guide. If you are contributing outside of the current year, be sure to select the applicable tax year for the contribution.

As a reminder, you are responsible for ensuring the total contribution amount that goes to your HSA each year does not exceed the IRS maximum for that year – Purdue does not track contributions made to your HSA outside of payroll. Questions around this process can go to HSA Bank at (800) 357-6246 and questions around taxes should be directed to a tax advisor.

Yes, you may elect to begin or change your HSA contributions at any time of the year, but changes may take 1-2 pay periods to take effect. Click here for instructions.

Yes.

For 2021, a person with individual/self-only medical coverage may have HSA contributions up to $3,600, and a person with family/self-plus-one-or-more-dependents medical coverage may have HSA contributions up to $7,200. 

 

Funds contributed in excess of your IRS contribution limit and the earnings on those funds are subject to penalty and tax unless you take one of the following additional actions. It is recommended you speak with a tax advisor.

  • Pay the excise tax on the excess contribution when filing your Federal Income Tax Return for the prior year. The funds would remain in your HSA and count as a current-year contribution; therefore you’d need to make sure you subtract the excess amount from the following year’s IRS HSA limits to determine the maximum amount you can contribute that year to avoid further penalties.
  • Complete an HSA Excess Contribution Removal Form and return it to HSA Bank by the tax-filing deadline. The excess amount will be removed from your account and refunded to you, less taxes.  Questions on this process may go to HSA Bank at 800-357-6246.

You may only transfer funds into your HSA from another HSA, an Archer Medical Savings Account (MSA), or an Individual Retirement Account (IRA). To do this, complete an HSA Direct Transfer Request Form and return it to HSA Bank.

You may not transfer funds from an FSA or HRA to an HSA (or vise-versa).

Yes. If you reach a minimum balance of $1,000 in your HSA, you can transfer funds above that amount to an investment account at HSA Bank. There are account fees and additional expenses associated with the investment accounts, depending on which option and investments you choose.

See "Interest and Investment Opportunities" earlier on this page for more information.

If you are still participating in an HSA while actively employed with Purdue at age 65 and have not enrolled in Medicare, you may continue to make or receive contributions to your HSA.; however, when you retire and enroll in Medicare after age 65, you are retroactively entitled to Medicare for up to 6 months, but no sooner than the first of the month in which you turned 65. This means any HSA contributions made to your account after your Medicare entitlement date will be considered taxable income. Additionally, a mid-year loss of eligibility will affect your contribution limits. It is recommended to consult a Tax Advisor for more information.

Note: Drawing benefits from Social Security at 65 and up requires enrollment into Medicare Part A which affects your ability to make or receive contributions to your HSA.

Upon turning 65, you may use your HSA funds on Medicare Parts A, B, and D premiums. Additionally, 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.

You are asked to designate your beneficiary when you first log in online at www.hsabank.com/hsabank/homepage.  To update, log in and click View Account Details under your Health Savings Account, then click My Profile under the My Health Savings Account menu on the left and you will see the Beneficiaries tab on the following page.  You may also complete the HSA Designation of Beneficiary Form and return it to the address at the bottom of the form.

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.

You are asked to designate your beneficiary when you first log in online at www.hsabank.com/hsabank/homepage. To update, log in and click View Account Details under your Health Savings Account, then click My Profile under the My Health Savings Account menu on the left and you will see the Beneficiaries tab on the following page.

You may also complete a Designation of Beneficiary Form and return it to HSA Bank using the address at the top of the form.

Enrollment in an HSA requires you to complete IRS form 8889 when you complete your taxes on an annual basis. Be sure to discuss this with your tax preparer.

See "Tax Forms Information" earlier on this page, just before the HSA FAQs for more information.

Log into www.hsabank.com and scroll down to “Quick View.” Hover over the green bar for the appropriate tax year column and you will be shown your total contributions for that year.

Accessing Your Funds

HSA Bank will issue you a debit card for your HSA or will sync your HSA to your HSA Bank card if you already have one from other account. You can also set up payments to a health care provider, order checks, and request reimbursements from your HSA to yourself from the member portal at HSA Bank.

If you incur out-of-pocket expenses and do not have funds available in your HSA to cover those costs, you will need to pay by other means. You can reimburse yourself after each pay period when funds are deposited in your HSA until you are paid back in full.

Instructions and options for reimbursement through your HSA are found in the HSA Bank member website guide linked on the left side of this page.

No. You are responsible for ensuring that your purchases using your HSA funds are qualified, and therefore should familiarize yourself with what expenses are and are not allowed. Be sure to keep your documentation with your records in case you ever need to defend your expenditures or decisions during an IRS audit.

To order a HSA Bank debit card, call HSA Bank directly at 1-800-357-6246 or log into the member portal at HSA Bank and select Manage My Debit Card(s). Note: Once you have been issued a total of two cards, there is a $6 fee per card afterwards.

When you use your card at a vision or dental office, funds will first be pulled from your Limited Purpose FSA until it is exhausted and then it will use your HSA funds. This distinction is made through the provider's merchant category code (number assigned to businesses based on their services offered) which is recognized when your card is used. When you use your card anywhere else, your HSA funds will be spent.

Eligible Expenses

Your HSA funds may be used for eligible medical, prescription, vision, and dental expenses incurred by you and by your eligible dependents (e.g. spouse, IRS-qualifying child — one you can claim on your taxes) during their HSA coverage period. For a full list of IRS-qualified medical expenses, please review IRS Publication 502.

Only the following premiums are considered eligible expenses for which you can use your HSA funds: 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.

You will have to pay taxes on any amount used for ineligible expenses. Additionally, you may incur a 20 percent tax penalty (unless you are 65 or older). Consult a tax advisor for more details.

  • HSA-HRA-FSA