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IntroductionWhat are the benefits of opening an HSA?The money you contribute to your HSA comes out of your paycheck before it is taxed, lowering your taxable income. Any HSA contributions you make in addition to your payroll deductions (subject to IRS limits) are fully deductible from your income tax. As long as you use the HSA for qualified health care expenses, you pay no penalty or taxes whenever you withdraw funds from your account. In addition, any earnings on your HSA are not taxed. You might think of your HSA as a vehicle that may be used on a tax-deferred basis to save for health care expenses from now through your retirement.
Do I need to choose a particular health plan to contribute to a health savings account (HSA)?If you wish to participate in an HSA, you must select the Value PPO plan. An HSA, by IRS regulation, is only available with high deductible health plans such as the University's Value PPO plan.
Can I choose the Value PPO plan and not open an HSA? Yes. You are not required to open an HSA when you enroll in the Value PPO plan. However, if you anticipate out-of-pocket expenses during calendar year 2009, it is to your advantage to enroll in the HSA for tax savings and the University's matching contribution for first time enrollees.
How are Mellon Bank and PayFlex involved in the Value PPO plan?Mellon Bank is the administrator for the Health Savings Account (HSA) offered in conjunction with the Value PPO plan. PayFlex administers all Flexible Spending Accounts (FSA) including the Limited Use flexible spending account, available if you choose the Value PPO plan. Both partner with Blue Cross, the administrator for the Value PPO plan.
Whom do I contact for questions or problems with my HSA?Mellon Bank is the HSA administrator. In the HSA kit you receive from Mellon Bank, you'll find information on how to manage your account, get answers to questions, and resolve any issues with the account.
Where can I go to learn more about HSAs?Go to the Mellon Bank HSA information site: https://hsamember.com or contact customer service at 1-877-635-5472.
Are there any Federal tax reporting requirements with an HSA?Yes. T he University, as an employer, is required to report employer HSA contributions to the IRS on the W-2 (box 12, code W) for each employee receiving a contribution for the calendar year as non-taxable wages. As participants are making contributions to the HSA through the University's payroll system, there is no need to complete IRS Form 8889 or to report contributions on page 1 of IRS Form 1040. Form 8889 would be required for contributions to an HSA that are not deposited pre-tax through payroll (i.e. cash deposits).
What's the difference between an HSA and a regular or traditional FSA?Though you contribute in the same way through payroll deductions and use the accounts for similar types of health care expenses, there are a few of key differences:
ContributionsDoes the money in my HSA earn interest?Yes, once the account reaches a pre-determined balance ($1,500 as of May 1, 2009) .
Is the government contribution limit for HSAs higher than the University's limit?Per government regulations, your maximum HSA contribution can be equal to the lesser of your high deductible health plan deductible or $3,000 (individual) or $5,950 (family).
I'm over age 50. Can I make catch up contributions to my HSA?If you are age 55 or older, you may contribute up to an additional $1000 during 2009 through payroll deductions.
If I enroll in the Value PPO plan and open an HSA, how much will the University contribute to my HSA? How much can I contribute?The maximum amount that can be contributed to your HSA for the 2009 plan year is the amount of the Value PPO plan deductible. If you choose to cover yourself only with no dependents covered, the maximum is $1,400. If you choose to cover yourself and your spouse, yourself and your child(ren), or yourself and your spouse and your child(ren), the maximum is $2,800. If you are a first time enrollee in the HSA plan the University will match what your contribution election to your HSA dollar-for-dollar, up to half of the plan deductible. That means you can contribute up to $700 if you enroll only yourself and the University will contribute an additional $700 at the beginning of the year for a total of $1,400. If you enroll in the Value PPO plan to cover yourself and other family members, you can contribute up to $1,400 to your HSA and the University will match your contributions, up to a total of $2,800. If you are age 55 or older during calendar year 2009, you may contribute up to an additional $1000 during 2009. The University does not match any contributions relating to age 55 or older. The University does not match contributions after the first year of participation in the HSA.
Is there a minimum amount that I can contribute to an HSA?Yes, the minimum amount for 2009 is $240.
Can I change the amount of my HSA contribution at anytime during the year?No. You cannot change your HSA contribution amount during the year unless you have a qualifying change in family or employment status. If you have a qualifying event, such as the birth or adoption of a child or a marriage or divorce, you may change your covered dependents and change the amount of your HSA contribution to correspond to the change by completing a Benefits Change form and submitted it to the Benefits Division within 31 days of the change.
Eligibility and EnrollmentHow do I enroll with Mellon Bank for my HSA account?Mellon Bank, our HSA administrator, will mail you a Welcome Kit after enrollment. After you complete the requested information including the signature card and return it to Mellon Bank, Mellon Bank will mail you your debit card and checks in time for you to start using them starting January 1, 2009. You can also use Mellon's Advantage webpage to activate your account online.
Do I have to actively enroll during Open Enrollment to continue contributing to my HSA the following year?You may continue to use the balance of your HSA even if you decide not to re-enroll in the Value PPO or another high deductible health plan at another employer. You must continue enrollment in the Value PPO plan and elect your new contribution amount for 2009 during Open Enrollment to have your contributions deducted from your paycheck before-tax in 2009.
I am enrolling in a HSA (Health Savings Account). Do I enter the employee contribution amount or the employee AND the employer contribution amount in the Annual Pledge field?Enter only the EMPLOYEE contribution amount into the Annual Pledge field when enrolling in the HSA plan.
I'm over age 65 and plan to continue working at the University during 2009. Can I enroll in the Value PPO plan?Yes, you may enroll in the Value PPO plan and contribute to the HSA as long as you continue working in a benefits eligible position at the University even if you are eligible for Medicare (but not enrolled). Once you are no longer working and are enrolled in Medicare including Medicare Part B, you may not contribute to your HSA, but you can use the HSA money for your health-related expenses, including your retiree medical coverage premiums.
I'm a retiree with University coverage. Can I elect the Value PPO plan and open an HSA?No. The Value PPO plan is not available to retirees.
Using the HSAWhat can I use HSA money for?You can use the money in your HSA for qualified medical, dental, prescription drug, and vision expenses (the same expenses that are eligible for tax-free reimbursement under an FSA—those expenses are listed on IRS publication 502 found on www.irs.gov ). The expenses include health care and prescription drug expenses that you pay for to satisfy your deductible and the coinsurance that you pay when you receive care or purchase prescription drugs after you have satisfied your deductible.
How do I pay for health care and prescription drug expenses using my HSA?You can pay for your health care and prescription drugs using your HSA debit card or the checks that you will receive from Mellon Bank, our HSA administrator. Of course, like any bank account, you must have funds available in your account before using your debit card or writing checks. You will be responsible for any overdraft fees. Note: Your HSA debit card may NOT be used at an ATM to withdraw cash or to pay for non-health expenses.
What happens when I go to the doctor—how do I use my HSA?When you visit an in-network provider, you should not pay at the time of service. The provider will file a claim with Blue Cross and the in-network discount for the services will be applied. An Explanation of Benefits statement will be sent to you. Your doctor will then bill you the amount you owe. You may pay the amount you owe the doctor using your HSA debit card or checks.
Can I use my HSA contributions for health care expenses that were incurred prior to establishing my HSA?No, only health care expenses incurred after the establishment of your HSA are eligible for reimbursement.
Coordinating with other AccountsMy spouse has a Flexible Spending Account (or Health Reimbursement Account) through his employer. Can I still contribute to an HSA?No. If your spouse's FSA or HRA could be used to pay for your medical expenses to meet your Value PPO plan deductible or for coinsurance, you may not enroll in an HSA.
My spouse has health care coverage through her employer and we're using that coverage for her and for our children. Can I use my HSA to cover our out-of-pocket expenses for their care?Yes. But keep in mind that the maximum HSA contribution for 2009 is $1,400 if you elect Value PPO plan coverage for yourself only. You cannot cover any dependents under the Value PPO plan if they are covered by another plan.
Can both my spouse and I have HSAs?If your spouse has an HSA and either of you are covered under the other's plan, you may have only one HSA. If you are not covering each other for health care services, you may both contribute to separate HSAs to cover the plans' single coverage deductibles.
Can my spouse and I fund a joint HSA?No. Joint HSA accounts are not permitted by the IRS.
I have an HSA already set up from a previous employer. Can I contribute to that HSA?You may direct your own contributions by personal check to your current HSA. However, you cannot contribute to your HSA through payroll deductions and the University will not make matching contributions to outside HSAs.
I already have an HSA and want to open a Northwestern HSA and receive the University's matching contribution for 2009. What happens to my current account balance if I do that?You can continue to use the balance but you can no longer contribute to that HSA.
Can I have both an HSA and a traditional FSA?No. But if you choose to contribute to an HSA, you may contribute to a Limited Use FSA that allows you to pay for qualified dental and vision expenses with pretax money. The Limited Use FSA cannot be used for health care expenses until your deductible has been met for the calendar year.
Life ChangesWhat happens to my HSA after I retire?You may continue to use your HSA to pay for qualified health care expenses, including retiree health and long term care premiums. However, after you enroll in Medicare, you can no longer contribute to your HSA.
What happens to my HSA if I leave the University?You may take your HSA with you when you leave the University. You also may use your HSA to pay for COBRA premiums if you elect to continue University health coverage. You cannot continue to contribute to your HSA unless you are enrolled in a high deductible health plan. Monthly administrative fees covered by the University for active employees will be charged, by Mellon Bank, directly to your account.
What happens to my HSA if I pass away?If your named beneficiary is your spouse, he or she may continue to use the HSA for health care expenses. Your HSA may be transferred to your surviving spouse tax-free. If the named beneficiary is not your spouse, distributions from the HSA are taxable.
What happens to my HSA if I get married during the plan year?If you choose to cover your spouse with University health care coverage, you must add your spouse within 31 days after your marriage. If you continue with Value PPO plan coverage for yourself and add your spouse, you may increase your HSA contribution for the remainder of the calendar year. The maximum annual 2009 HSA contribution for you + spouse coverage is $2,800 per year but your contributions will be limited to the annual amount pro-rated based on the month you begin to cover your spouse. Keep in mind that your spouse cannot be covered by any other health care plan—including a flexible spending account or health reimbursement account—if you wish to cover your spouse with the Value PPO plan and contribute to an HSA for you + spouse coverage.
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| Plans | Type of Employee | Life Change Event | Benefits FAQ | Benefits Forms | Provider Contact Information Human Resources Home | Jobs | Training & Development | Benefits | Payroll | HRIS | Forms | Policies & Procedures Staff Handbook  | Holiday Schedule | Human Resources Staff.Northwestern Home | Northwestern Calendar: Plan-It Purple | Northwestern Sites A-Z | Northwestern Search Human Resources 720 University Pl. Evanston, IL 60208 Phone: 847-491-7513 Fax: 847-467-2288 E-mail:benefits@northwestern.edu Last updated 11/23/2009 World Wide Web Disclaimer and University Policy Statements © 2009 Northwestern University |
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