HEALTH SAVINGS ACCOUNT
Note: the HDHP has been designed to ‘Qualify’ under the Authority’s I.R.C. Section 125 Plan. This means that if you enroll in the High Deductible Health Plan (HDHP) you may also qualify to contribute to a Health Savings Account (HSA). You may not enroll in the HSA if you enroll in the PPO, EPO or waive health coverage through DRBA.
- An HSA is a tax advantaged personal savings account that can be used to pay for medical, dental, vision and other qualified expenses not covered by the HDHP now or later in life. Funds contributed to an HSA are triple-tax-advantaged: money goes in tax-free; money comes out tax-free, and you can earn interest on your contributions tax-free.
- In 2022, you may contribute up to $2,900 to an HSA if you have employee-only coverage (maximum annual contribution including DRBA’s is $3,650 (single) or up to $6,550 if you cover a family member (maximum annual contribution including DRBA’s is $7,300 (family) in the HDHP. Also, if you are age 55 or older, you may contribute an additional $1,000 to an HSA.
- Further, if you enroll in the HDHP and you qualify to contribute to an HSA, the Authority will also contribute $750 to your account. DRBA contributions will be made over 24 pays throughout the plan year ($31.25 per pay). The Authority is not obligated to continue making HSA contributions in future years. However, the Authority has decided to make the contributions in 2022 to provide enrollees to the HDHP with a ‘cushion’ against the high out-of-pocket expenses under the HDHP.
- The HSA Plan is administered by Employee Benefits Corporation (EBC) and, if you qualify to contribute, funds are deposited to your individual account at Avidia Bank. Avidia Bank will determine if you are qualified to open an HSA account under the Patriot Act.
- Note: if you are covered by any type of Medicare (even Part A) or if you are covered by a Full Medical Flexible Spending Account through your spouse’s employer, you are not eligible to contribute to an HSA. It is your responsibility to consult with a tax professional to determine if you qualify to contribute to an HSA.
- A debit card will be provided once your HSA bank account is funded and can be used to pay for eligible expenses under the plan.
- If you elect the HDHP and qualify to contribute to an HSA, the balance in the HSA at the end of the plan year is yours to keep whether you change health plans or leave the Authority in the future. Under Federal regulations there are limitations on how the remaining monies can be used to ensure that you do not lose the triple-tax-advantaged nature of the funds in the account.