Reminder: For those on the academic pay schedule, please be aware that your voluntary employee Health Savings Account (HSA) contributions will not be taken during the months of May through August, but will still receive Purdue’s contributions.

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, Purdue Health Plan Plus HSA 2, and the Health Savings Account (HSA)

These questions and answers are designed to give you the basic concepts of our HSA-qualified health plans. Enrollment into one of these plans 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 or view IRS Publication 969

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

HSA Basics and Contributions

Eligibility for HSA

Using the HSA and Limited Purpose FSA

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 health 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?

CVS Caremark reviewed the legislation that authorizes HSA-qualified health 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.

May I enroll in one of these plans even if I am not eligible for an HSA?  

Yes.  You may enroll in either the Purdue Health Plan Plus HSA 1 or the Purdue Health Plan Plus HSA 2 and decline to enroll in an HSA.  You have the option of instead enrolling in a health care Flexible Spending Account (FSA) if desired.

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. First, contributions to the account are pre-tax, second, withdrawals from the account are tax-free so long as the funds are used on eligible health care expenses, and third, 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, HSA Bank will first attempt to verify your identity through a required screening process known as “vetting” before they can open your account (as per the USA PATRIOT Act).  If you do not pass the vetting process, HSA Bank will mail a letter to you requesting additional information such as verification of your name and/or SSN or verification of your residential street address (not a P.O. Box).  Once the process is complete, HSA Bank will open an HSA in your name and Purdue will pay its 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.  HSA Bank will contact you with a mailing detailing the changes that take place when this occurs.

To receive contributions to an HSA, one of the eligibility requirements states you must be enrolled in an HSA-Qualified health 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 eligible vision, medical, prescription, and dental 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

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

If you elect to receive HSA contributions from Purdue, funds will be deposited to  your HSA each pay period through payroll based on your health coverage (self-only or one or more dependents). You may also make pre-tax contributions to your HSA through payroll deduction.  In Benefitfocus, enter the per-paycheck amount you’d like to contribute.  Your remaining number of pays in the year will be reflected in the system.  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 but will still receive Purdue’s contributions during that time.  You may change your contribution at any time throughout the year. Contributions may take 1-2 pay periods to take effect.  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 2019, an individual can have HSA contributions up to $3,500, and a family can have HSA contributions up to $7,000. For 2018, an individual can have HSA contributions up to $3,450, and a family can have HSA contributions up to $6,900. These amounts assume you are eligible to receive contributions to an HSA for the entire plan year and may be affected by mid-year HSA elections.

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.

To help determine how much you can contribute to your HSA, please see our HSA Interactive Guide.

What do I do if I over-contribute to my HSA?

You will need to take steps to rectify your account in order to minimize the tax ramifications associated with contributing more than what is allowed.  Please contact HR at (765) 494-2222 or hr@purdue.edu for guidance.

If both spouses are actively participating in/receiving contributions to an HSA (whether through Purdue or another employer), how much can each spouse contribute to their HSA?

Spouses must collectively adhere to the family contribution maximum, which is $6,900 for 2018 and $7,000 for 2019.  Whether both individuals have single coverage or one or both are additionally covering children on a high deductible health plan, the combined contributions to the HSAs by each spouse cannot exceed the family contribution maximum ($6,900 for 2018/$7,000 for 2019) and should be divided between them by agreement.

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.

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 HSA Bank with several different options to invest your money. Details about the HSA investment funds will be available through your member account at HSA Bank if you elect an HSA.

If you choose to participate in the HSA Bank 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 HSA Bank?

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

See question What is the Health Savings Account (HSA)?

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

You can access a rollover form from HSA Bank 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 insured?

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

Can I transfer funds from my FSA (or HRA) to an HSA and vise-versa?

No.

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

The monthly account maintenance fee is HSA Bank’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 a health plan that is not HSA-qualified, for example), the HSA will become a retail account and you will be responsible for paying the monthly account maintenance fee.  HSA Bank will mail you a letter with more information when your HSA becomes a retail account.

Eligibility for HSA

Can I be covered by my spouse's health insurance at another employer and elect 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 health plan is an HSA-qualified plan, you may have dual coverage under both plans. If you are covered by another health 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, TRICARE, or VEBA, and/or I’m receiving Social Security benefits.  Can I elect and receive contributions to 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 may not participate in an HSA and or receive the associated Purdue contributions.

My spouse or children have health coverage under plans that are not HSA-qualified. Can I elect and receive contributions to an HSA if I cover them under my HSA-qualified plan secondary to their current insurance?

Yes, HSA eligibility depends on the person opening the account; therefore, your spouse and children may be covered by an HSA-qualified plan under you (though not required) and plans that are not HSA-qualified at the same time.

I'm on COBRA, can I elect and receive contributions to an HSA?

If you are an employee who has an HSA-Qualified health plan, and you terminate employment, you will still retain possession of your HSA 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. You may choose to continue the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, but will no longer be able to elect or receive contributions to an HSA.

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

No, you may not switch health plan choices during the plan year, but you can  add or remove dependents to/from your current health plan with a qualifying life event (e.g., a birth or divorce).  You may choose to elect a new plan during the annual Open Enrollment (typically around October) which would be effective January 1 of the following plan year.    As a reminder, you can change the amount you contribute to an HSA at any time throughout the year without a qualifying life event.

Can I elect an HSA and a Health Care FSA at the same time?

No.  Participating in a Health Care FSA renders you ineligible to receive contributions to an HSA when their effective dates overlap.  The only way you’d be able to participate in both during the same plan year would be if your Health Care FSA coverage ended, such as by the end of your employment with a previous employer, for example, and you elected an HSA with your new position.

Can I elect and receive contributions to an HSA if my spouse has an HSA, FSA, or HRA?

You and your spouse may both participate in/receive contributions to an HSA in the same plan year; however, you are not eligible to participate in an HSA during the same time your spouse has a Health Care FSA or an HRA.  You have the option to elect an HSA-qualified health plan and decline the HSA or to elect the Purdue Health Plan which is not HSA-qualified, or your spouse must decline to take the Health Care FSA or HRA.  Limited Purpose FSA and Dependent Care FSA participation do not affect your HSA eligibility.

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.  HSA Bank 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 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 an HSA-qualified health plan?

If you are no longer covered by an HSA-qualified health 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 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, 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.  HSA Bank 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?

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 you 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?

Upon turning 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.

What happens to my HSA if I die?

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 Beneficiary Designation 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.

Using the HSA and Limited Purpose FSA

What can I use my Health Savings Account (HSA) 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. See a list of eligible and ineligible expenses. 

Can HSA money be used to pay insurance premiums?

The only insurance premiums considered eligible medical expenses for an HSA are as follows: 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 receive contributions to 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 (funds spent) from your HSA to assist with year-end tax preparation.  Contributions to your HSA (including yours and Purdue’s) will be reported on your W-2.

How can I access the money in my HSA?

HSA Bank will issue you a debit card for your HSA (up to two cards by request, 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 HSA Bank. You can also set up recurring payments to a health care provider.

How does my HSA Bank card work if I have an HSA and a Limited Purpose FSA?

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.  When you card is used anywhere else, your HSA funds will be spent.

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

To order a HSA Bank debit card for yourself or a dependent, call HSA Bank directly at 1-800-357-6246 or log into your HSA Bank account at www.hsabank.com/hsabank/homepage 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 funds as they are made available in your account, including the Purdue contributions.  As a reminder, HSA contributions are made incrementally each pay period over the course of the year while you are still actively employed and enrolled in one of the Purdue HSA-qualified health plans. If you incur out-of-pocket expenses and do not have funds available in your HSA to cover those costs, you can reimburse yourself when the funds are deposited in your HSA after each pay period. You may access the funds using one of the methods described in the questions above.

Can I still have a Flexible Spending Account (FSA) if I choose a health plan with an HSA?

If you choose a health 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 already 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 health 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. In addition, unlike funds in the HSA, Limited purpose FSA funds are available on January 1 when elected during open enrollment or on the date your account is opened when elected mid-year.

My spouse and/or children have another form of health 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 health plan?

Yes, eligible medical expenses for IRS-qualified 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 health plan do not apply to the deductible and coinsurance for your Purdue health plan.

Where can I learn more about how HSAs operate?

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. There is also an extensive FAQ about Health Savings Accounts on the Department of Treasury website as well as on the HSA Bank website.

hsabank

HSA Bank Customer Service
1-800-357-6246
askus@hsabank.com

HSA Bank website

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