August 4, 2016

Health savings account eligibility expanded for veterans

Recently, an amendment was made to one of the health savings account eligibility rules for veterans. Now, veterans who are enrolled in a high-deductible health plan with no disqualifying coverage and who have a service-connected disability are eligible to make or receive HSA contributions regardless of when they received Department of Veterans Affairs benefits. 

Before the amendment, veterans who received medical benefits from the Department of Veterans Affairs couldn’t contribute to an HSA for three months following care. This amendment also applies to the contributions from the veteran’s employer. Today, veterans with a service-connected disability will not be blocked from HSA eligibility because they accessed VA benefits in the past three months.

The new rule is not a qualifying event and veterans are responsible for determining their eligibility. Also, if veterans receive VA medical benefits for a non-service-connected disability during the prior three months, they still are not eligible to make or receive HSA contributions. The determining factor that allows the contributions is that the treatment was for a service-connected disability.

To recap, here is a summary of the changes and how veterans are affected.

What’s changing for veterans?
Following an amendment made earlier this year, veterans and their employers are eligible to contribute to an HSA, if:

* The veteran’s hospital care or medical services are for service-connected disability.

* All other HSA eligibility requirements are met.

Here’s what veterans need to know:

* This new rule is not a qualifying event.

* Veterans are responsible for determining their eligibility.

* Veterans will still need to have a qualifying high-deductible health plan to contribute to an HSA.

* If veterans receive VA medical benefits for a non-service-connected disability during the prior three months, they still aren’t eligible to make or receive HSA contributions.

The bottom line is that this change eases the restrictions on HSA eligibility for veterans with service-connected disabilities who are covered by an HDHP but may also receive VA medical benefits.

Questions can be directed to Human Resources at 49-42222, hr@purdue.edu or HRHelp


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