health savings account

A Health Savings Account (HSA) is a tax-advantaged account that works with the High Deductible Medical Plan. Use the account to pay eligible health care expenses tax-free now or in the future.

who's eligible

  • You must participate in the High Deductible Medical Plan to open an HSA.
  • You cannot have other health insurance coverage that is not a high deductible health plan, including coverage under your spouse's medical plan.
  • You cannot be on Medicare.
  • You cannot be claimed as a dependent on another person's tax return.

how the hsa works

When you enroll in the High Deductible Medical Plan, you can open an HSA with PayFlex. PayFlex will administer your HSA.

Below is a high-level overview of the 2016 HSA. For details, visit the Payflex website.

Plan Features

Contributions

You can make pre-tax payroll contributions to your HSA, up to IRS limits (for 2016):

  • Employee Only: $3,350
  • Employee + One/Family: $6,750

If you and/or your spouse are age 55 or older by the end of 2016, you and/or your spouse can make an additional “catch-up” contribution of $1,000.

Using Your HSA

Each time you have a qualified expense, you decide whether to:

  • Pay out-of-pocket and let your HSA grow, earning interest for future eligible expenses (e.g., medical expenses during retirement), or
  • Use your HSA to pay for eligible medical expenses such as your annual deductible and coinsurance.

Eligible Expenses

Eligible expenses, as defined by the Internal Revenue Service (IRS), include:

  • Medical deductibles, copays and coinsurance
  • Prescription drugs
  • Over-the-counter medications with a doctor's prescription
  • Dental and orthodontia services
  • Vision care
  • Insulin
  • Hearing aids
  • Medicare, COBRA and qualified long term care expenses

The expenses must be incurred by you or an eligible dependent.

Coordination with Health Care Flexible Spending Accounts

Special IRS rules apply. If you have an HSA, you may enroll in a Limited Purpose Flexible Savings Account (FSA) only:

  • Before you meet your High Deductible Medical Plan annual deductible, you may use your Limited Purpose FSA for qualified dental, vision and certain preventive drugs and services only.
  • After you meet your High Deductible Medical Plan annual deductible, you may use your Limited Purpose FSA for all qualified health care expenses.

Invest Your Account

Your contributions are deposited in an interest-bearing, FDIC-insured cash account. If you choose to let your HSA grow rather than use it to pay for eligible health care expenses, you have a variety of investment options available to you.

Unused Balance

At year end, any unused balance carries over.

Portability

You own the money in your HSA. So if you leave CRC, switch to another medical plan or even retire, your HSA and the money in it is yours to keep.

 

 

 

related sites

Payflex  »

forms/docs

PayFlex Resource Center  »

dig deeper

HSA Quick Reference Guide  »

Eligible Expenses »

HSA Triple-Tax Advantage

When you contribute to an HSA, you get triple-tax advantages:

  • Your contributions are tax-free.*
  • The account grows tax-free.
  • You pay no taxes when you use the money for qualified health expenses.

*"Tax-free" applies to federal income tax and, in most states, state income tax. In California, contributions are deducted after state income taxes.