Health Care Savings Account (HSA) FAQs
What are the benefits of an HSA? Accordion Closed
There are many benefits to an HSA.
- Each pay period NAU contributes your account!
- You can make pre-tax contribution.
- You can pay for qualified expenses tax free.
- Unused funds rollover year to year.
- Your account is yours and goes with you if you leave NAU.
Who will administer my HSA? Accordion Closed
That depends on the HDHP you are enrolled in.
- If you are enrolled in the NAU HDHP Health Equity will administer your HSA.
- If you are enrolled in the State of AZ HDHP Optum will administer your HSA.
What happens to my HSA account if I leave the university? Accordion Closed
The funds in your account remain your and you can use then to cover future healthcare expenses. Your administrator will charge you a monthly fee. If you enroll in another employer’s HDHP with an HSA you may be able to transfer your fund to your new HSA.
What happens to my HSA if change medical plans during Open Enrollment from the NAU or the State of AZ HDHP to another type of medical plan life the NAU PPO or the State of AZ Triple Choice Plan? Accordion Closed
Since you are no longer enrolled in a qualifying HDHP you will not be able to make future contributions to your HSA account
The funds in your account remain your and you can use then to cover future healthcare expenses. Your administrator will charge you a monthly fee.
What happens to my HSA when I die? Accordion Closed
If you are married, your spouse will become the owner of the account and assume it as their own HSA. The money in the account will pass to your beneficiaries or become part of your estate, and it will become subject to applicable taxes.
Who can contribute to an HSA
Are there any limitations on who contribute to an HSA? Accordion Closed
Anyone can enroll in the HDHP but there are limitations and who participant in the Health Care Savings Account. To contribute to an HSA, the IRS requires you:
- Must be enrolled in a Qualified HDHP, such as the new NAU BCBSAZ HDHP or the State HDHP
- Cannot be covered by Health Coverage that is not Qualified (includes spousal FSA, Medicare, Tricare, IHS or a traditional health plan)
- Cannot be enrolled in Medicare A or B
- Cannot be a dependent on someone else’s tax return
- Cannot use the VA for a non-service related injury.
Note: Since you are the account holder these limitations apply to you not your dependents.
I am eligible for IHS Services can I still enroll in a HDHPHSA? Accordion Closed
Yes. Merely being eligible for to receive care does not affect your HSA eligibility. However, receiving certain services can make you ineligible to receive or make contributions to your HSA and lowers the annual amount you can contribute your HSA.
Per the IRS Notice 2012-14,
‘an individual who is eligible to receive medical services at an IHS facility, but who has not actually received such services during the previous three months, is an eligible individual within the meaning of § 223(c)(1) of the Internal Revenue Code who may establish and make tax-free contributions to an HSA. However, an individual generally is not an eligible individual if the individual has received medical services at an IHS facility at any time during the previous three months.’
If you receive IHS services that would make you ineligible for HSA contributions and it is your responsibility to contact Human Resources to stop NAU’s and your HSA contributions.
For more information
- Visit the IRS website at https://www.plansponsor.com/irs-provides-guidance-on-hsas-for-users-of-indian-health-service/
- Review page 39 of Health Equity’s HSA Guidebook
- Contact your tax advisor
How much can I contribute to an HSA? Accordion Closed
For 2023, the IRS set an annual contribution limit of $3,850 for individual coverage and $7,750 for family coverage. If you are age 55 or older you can contribute an additional $1,000 each year. Contributions made by you, NAU and family members to any HSA all count toward the IRS limit.
Note: You as the primary account must be age 55 even if your spouse is not of that age.
How do I make contributions to my HSA? Accordion Closed
Most contributions are made through payroll deduction but you can also make contributions directly to your HSA administrator. Keep in mind that if you make direction contributions NAU will not have record of those contribution and you could exceed the annual IRS maximum.
Can I change my contribution amount? Accordion Closed
What happens if my contributions exceed the IRS annual contribution maximum? Accordion Closed
If you contribute more than the IRS annual contribution maximum, you have until the tax-filing deadline to withdrawal excess contributions. If excess contributions are not withdrawn by the deadline line, an annually assessed excise tax of 6% will be imposed on any excess contributions.
What happens if I am no longer covered by a qualified high deductible plan (HDHP)? Accordion Closed
While you can no longer contribute to your HSA, you can still use the remaining funds in our HSA for qualified medical expenses.
What can I use my HSA for? Accordion Closed
You can use funds in your HSA to pay for qualified medical expense like:
- Doctor office visits, lab fees and medical procedures
- Dental care, including extractions and braces
- Vision care, including contact lenses, prescriptions sunglasses and LASIK surgery
- Prescription medications and over the counter treatments
Refer to IRS publication 969 for a complete list of eligible expenses and HSA rules.
Can I reimburse myself prior to my contributions being deposited in my HSA account (like the Health Care FSA)? Accordion Closed
No, unfortunately you can only request to be reimbursed, or to pay medical expenses with the funds available in the current balance. The other thing to keep in mind is that there is no time limit with an HSA to reimburse yourself for qualified medical expenses that you pay out-of-pocket. You can accumulate the reimbursable amount until you reach a determined goal while building tax-free earnings.
Can I reimburse myself prior to my enrollment in my HSA? Accordion Closed
No. Only expenses incurred after the date the HSA is effective are qualified.
Can I use the funds in my HSA account for my dependent’s covered health care expenses? Accordion Closed
The HSA funds can only be used for tax dependents. So, if you can claim a dependent on your taxes you can use your HSA funds their covered health care expenses.
Are health care premiums considered qualified medical expenses? Accordion Closed
In general, no, but exceptions include: qualified long-term care insurance, COBRA continuation coverage, and health plan maintained while receiving state or federal unemployment compensation.
If you are over age 65, qualified medical expenses can include: employer-sponsored retiree medical premiums for medical Part A or B or a Medicare HMO. Premiums for Medigap policies are not qualified medical expenses.
Is there a time limit for reimbursing myself? Accordion Closed
No, you can reimburse yourself at any time for expenses you paid for out-of-pocket. There is no time limit, but the expenses must have been incurred since you opened your HSA. You should keep your itemized receipts in case of an IRS audit.
Can I use my HSA to pay for non-health-related expenses? Accordion Closed
Yes. However, any amount distributed that is not used exclusively to pay for qualified medical expenses for you, your spouse or your eligible tax dependent should be included in your gross income. These distributions are subject to taxes and an additional 20% tax penalty, except in the case of distributions made after your death, disability or reaching age 65.
High Deductible Health Plan
What is a qualifying HDHP? Accordion Closed
It is a health care plan that satisfies certain IRS requirements. For 2023, at least $1,500 in deductibles for individual coverage and $3,000 for family coverage. For more details refer to IRS publication 969.
Can I use Campus Health Services (CHS) with the HDHP\HSA plans? Accordion Closed
You can see Campus Health Services (CHS) providers, but you will need to meet your deductible before eligible expenses are paid by the plan. As CHS charges are generally lower than those of community providers, this can help reduce your out-of-pocket expenses.
HSA vs FSA
What is the difference between the NAU Health Care Flexible Spending Account (FSA) that I have contributed to for years and the Health Care Savings Account. Accordion Closed
There are several differences.
Health Care Flexible Spending Account (FSA)
- Can be enrolled in any type of health care plan.
- You contribute pre-tax dollars to an account up to the plan maximum of $3,050 for 2023.
- Funds are used to cover eligible health care expenses.
- Unused funds can be rolled over to the next plan year. The rollover provision was temporarily expanded to allow any remaining 2021 balances to roll over for use into 2022.
- Funds up to your annual contribution amount are available on the first day of the plan (before they are deposited)
Health Care Savings Account (HSA)
- Must only be enrolled in a High Deductible Health Care Plan (HDHP)
- You and NAU contribute pre-tax dollars to an account up to the IRS maximum for 2022 of $3,650 for employee or $7,300 for all other coverage levels)
- Unused funds rollover from year to year and you take the account with you if you leave NAU
- Funds are used to cover eligible health care expenses
- Funds are not available for use until they are deposited in your account
Can I enroll in both the Health Care Flexible Spending Account (FSA) and the Health Care Savings Account? Accordion Closed
Yes, but there are limitations. If you are enrolled in an HSA, you can also make contributions to a ‘Limited Purpose FSA.” You can only pay for Dental and Vision expenses with a ‘Limited Purpose FSA.” Medical expenses would need to be paid out of your HSA.
Still have questions??
Review additional FAQs on other Benefit plans or contact the Benefits Team at firstname.lastname@example.org or call (928) 523-2223.