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Health Savings Accounts (HSAs)

Health Savings Accounts, also known as HSAs, are available only to those who enroll in the port-sponsored High Deductible Health Plan (HDHP). Like a Flexible Spending Account, you can use an HSA to reimburse your eligible out-of-pocket health care expenses that aren’t covered by your high-deductible health plan, such as amounts you pay toward meeting the deductible, or other out-of-pocket costs.

You also can use the HSA to pay for eligible health care expenses incurred by your spouse, children, or other dependents claimed on your tax return. If your children are not your tax dependents, for their expenses to be eligible, they must not turn 19 (or 24 if a full-time student) in 2018.

Unlike an FSA, your HSA funds are individually owned—they are yours to keep regardless of your circumstances or your employment status.

You cannot be reimbursed for more than you have in your account at any given time. However, you can enroll, stop, increase, or decrease contributions on a monthly basis (click here for the form). HSAs also have no limit to the amount of funds that can roll over from year to year. The money contributed into your HSA is tax-free, grows tax-free through interest and potential investment earnings, and withdrawals are tax-free if they are for qualified medical expenses. For this reason, some people use HSAs to save for healthcare in retirement.

Please read the PayFlex Health Savings Account Custodial Agreement for other important disclosure provisions that will apply if you elect an HSA.

HSA Annual Maximum Contributions

The maximum contribution to your HSA is $3,450 for an individual account and $6,850 for a family account. This includes both your contributions and the Port contribution if you earned your wellness rewards points in the previous plan year. If you are age 55 or older on December 31, 2018 you may contribute an extra $1,000 as a catch-up.

Don’t forget, if you earned your 2017 wellness reward, in January 2018, the Port will contribute $500 for an individual with employee-only coverage, and $1,000 for employees with family coverage, to your HSA. That’s tax-free money in the bank to help you pay for out of pocket medical costs! Remember that you must elect the HSA plan to receive the port contribution even if you elect to contribute nothing by payroll deduction.

When contributing to your HSA through pay deduction, please note that HCM has a per paycheck limit (your annual maximum ÷ 24). The annual maximum varies based on three factors: whether the account is for an individual or family, whether or not you earned the wellness reward, and if you are age 55 or older. For example, the maximum per paycheck contribution for an employee-only account with an earned wellness reward is $122.92. The maximum for a family account for a 55-year-old eligible employee with wellness reward is $285.42.

If you think you may need more money in your account earlier in the year, you have the option to write a check to BNY Mellon for deposit to your HSA account. Please note that you will need to keep track of your direct contributions to your HSA and ensure that your total contributions do not exceed the annual limit. You may need to notify Human Resources to decrease or stop your HSA payroll deductions to ensure your contributions do not exceed the annual limit. Also remember to include these direct contributions when you file your taxes to get the appropriate deduction.

HSAs are Portable

An HSA is individually owned—it is yours to keep regardless of your circumstances or employment status. All unused amounts, including any interest and investment earnings, roll over from year to year. You can continue to withdraw tax-free from your account for qualified healthcare costs until you have used up all of your HSA savings, even after you retire.

And although you have to be enrolled in an HDHP to make tax-free contributions to the HSA, it doesn’t matter what kind of health plan you’re enrolled in for you to make withdrawals from your HSA.

Qualified HSA Costs

You can use the HSA to get reimbursed for eligible out-of-pocket health care expenses that aren’t covered by your high-deductible health plan, like amounts you pay toward meeting the deductible, or other out-of-pocket costs.

You also can use the HSA to pay for eligible health care expenses incurred by your spouse, children, or other individuals you legally claim as a dependent on your federal income tax return.

You may use your HSA for hundreds of healthcare-related expenses, including:

  • Health plan copays
  • Dental work and orthodontia
  • Eye exams, eyeglasses, or contact lenses
  • Chiropractic treatment
  • Over-the-counter healthcare items
  • Prescriptions
  • Mental health counseling

To see a standard list of eligible items, visit the PayFlex website.

HSA Eligibility

There are a few things to consider when determining if you are eligible to enroll in an HSA. You are NOT qualified when you are:

  • Covered by any other non HSA-compatible health plan (e.g. through your spouse)
  • Covered by a general-purpose healthcare FSA or health reimbursement account (HRA), including your spouse's
  • Claimed as a dependent on another person’s tax return (excluding spouses per Internal Revenue Code)
  • Enrolled in Medicare
  • Receiving health benefits under TRICARE

Read IRS Publication 969 for other situations that may make you ineligible for an HSA. If you enroll in the HDHP and you are not eligible for an HSA, you may still enroll in a general-purpose healthcare FSA. Otherwise, you are only eligible for a limited-purpose healthcare FSA (see below).

Combining an HSA with an FSA

Employees enrolled in the Aetna HDHP who contribute to an HSA are not eligible for a general-purpose healthcare FSA. Instead, you may enroll in what is known as a limited-purpose FSA. Because both the HSA and the FSA are tax-advantaged plans, there are some rules. You may only use your limited FSA for eligible vision and dental costs until you meet your health plan deductible. After you meet your deductible you then may use your FSA dollars to pay for other eligible healthcare costs.

Getting Reimbursed

PayFlex, the same company who administers our FSAs, also will administer your HSA. The reimbursement process will be similar to how you submit your claims for a Healthcare FSA: You may use your no-fee debit card, ask PayFlex to pay your provider directly, or submit a reimbursement request online at Unlike a Healthcare FSA, you may only be reimbursed up to the amount you already have contributed to your HSA. Also, unlike a healthcare FSA, you do not need to send PayFlex a receipt, but you are responsible for keeping your receipts in the event you are audited by the IRS.

Investment Options

PayFlex contracts with BNY Mellon to administer the mutual fund investment options. You can begin using the PayFlex mutual fund investment program once your HSA has more than a $1,000 balance.

The PayFlex HSA interest rate for FDIC-insured accounts is a tiered rate scheduled as shown below:

​HSA FDIC-insured
Account Monthly Balance
​Interest Rate
(Effective March 1, 2017)
​$0.01 - 2,000.00 ​0.05%
​$2000.01 - $7,500.00 ​0.10%
​$7,500.01 - $10,000.00 ​0.20%
​Over $10,000 ​0.40%
HSA Terms and Conditions

If you enroll in an HSA via HCM Self-service, you will see a link to the PayFlex HSA Custodial Agreement, and you will be required to acknowledge that you have read it.

Last Month Rule

As explained in greater detail in IRS Publication 969, sometimes an employee does not have an HDHP for the entire year. He or she may start at some point after January 1. This would be true for late enrollees, new hires, and for plan years that do not start on January 1.

  • If you have an HDHP on December 1, you can contribute to the HSA as if you were eligible all year. You would have to stay in the HDHP through the "testing period." The testing period starts the month of December. It continues through the end of the next year. This is a total of 13 months. If you do not stay in an HDHP through the testing period, then the contributions for the months that you did not have the HDHP are no longer tax-free. You would also have to pay a 10% penalty.
  • Example: You have a self-only plan as of Dec. 1, 2017. You did not have an HDHP for the first 11 months of the year. You can still contribute to the HSA for the full year. For 2018, that is $3,450. You must have an HDHP from Dec. 1, 2017 through December 31, 2018. That's the testing period. If you no longer have the HDHP at some point in 2018, you would have to pay income taxes on the amount that you contributed for the first 11 months of 2017. You would also have to pay a 10% tax penalty on that amount.
Where to Find More Information about HSAs