Page 8 - PSRS Benefits at a Glance 2017

Health Savings Account (HSA)

What is a Health Savings Account (HSA)? Why should I elect an HSA?
A Health Savings Account (HSA) is an account that can be Cost Savings
funded by you with pre-tax dollars, by your employer, or both.
The HSA helps pay for eligible medical expenses not covered • Tax benefits (triple benefits!)
by an insurance plan, including the deductible, coinsurance, • HSA contributions are excluded from federal
and in some cases, health insurance premiums. income tax.
• Interest earnings may be tax free.
Who is eligible for an HSA? • Withdrawals for eligible expenses are exempt from
Anyone who satisfies all of the following: federal income tax.
• You pay a reduced medical plan premium contribution.
• Covered by a Qualified High Deductible Health Plan • Unused money is held in interest-bearing savings or
(HDHP); investment accounts from year to year.
• Not covered under another medical plan that is on a
HDHP; Note: Many states have passed legislation to provide favorable state tax treatment
• Not entitled to Medicare benefits; and for HSAs. However, in a small number of states, amounts contributed to HSAs and
interest earned on HSA accounts could be included in the employee’s compensation
• Not eligible to be claimed on another person’s tax return. for state income tax purposes.
When do I use my HSA? Long-Term Financial Benefits
• Save for future medical expenses, including retiree
After visiting a physician, facility, or pharmacy, request that medical
they submit your claim to UMR for payment. Once the claim
has been processed, any out-of-pocket expense will be billed. • Funds roll over year to year
At this time you may choose the following options: • This is your account — you take it with you. If you leave
your employer you can do the following:
• Use your HSA debit card or HSA check to pay for any out-
of-pocket expenses. • Leave your funds in the current HSA account;
• You may choose to write a personal check, receiving • Transfer your funds to an HSA with your new
reimbursement at a later date. employer; or
• You can choose to save your HSA dollars for future • Transfer your funds to another qualifying account
medical expenses. within 60 days
Also, remember to keep all medical receipts and Explanation Choice
of Benefits (EOBs) to support your personal tax record. You • You control and manage your health care expenses.
should keep these records for at least four years.
• You choose when to use your HSA dollars to pay your
Can I contribute to both an HSA and FSA in health care expenses.
the same year? • You choose when to save your HSA dollars and pay health
care expenses out-of-pocket.
Yes, a “Limited Purpose FSA” is permissible. A limited FSA • You can choose to increase or decrease your election
only allows reimbursement of certain expenses that are not during the year (as allowed by your employer).
eligible for payment under the HDHP or HSA. Your employer
has established a limited FSA to allow employees to contribute
pre-tax dollars to an account which only reimburses expenses So how might an HSA or FSA benefit you?
for dental and vision services. Check out the “Tax Savings” section of ALEX, your virtual
benefits counselor at
How much can I contribute?
https://benefits.myalex.com/psrsmo/2017
As noted by federal law, the annual contribution limits are:

8 2017 BENEFITS AT A GLANCE