Can i withdraw cash from hsa debit card -
FSA, HRA, HSA Benefits Debit Card Convenient and Secure
Card payments are part of everyday life. No matter where you go doctors offices, pharmacies, grocery stores, retail shops, taxis, subway stations, and more you can use a credit or debit card to pay for goods and services. Cards are more convenient and secure than cash or check, and more and more employers are making them an essential part of their benefits packages.
When you have a benefits debit card linked to your Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), or Health Savings Account (HSA), you can enjoy extraordinary convenience and security.
Benefits Debit Card Overview
FSA Debit Card
Plan participants with an FSA debit card can use it in stores and online to pay for IRS-approved healthcare expenses. Some retailers and pharmacies clearly identify FSA-approved items, and many card processors offer auto-adjudication for those purchases. There are also specialty online stores, like mynewextsetup.us, that sell only FSA eligible items. This makes it easy for card holders to know where their FSA dollars are going; the restricted purchasing helps to stop fraud and misuse.
If you have a Dependent Care FSA (also known as DCAP) with a card, you can use it to pay tuition and fees at the childcare provider.
HRA Debit Card
If your company offers HRAs, it can add an account-linked card for employer-approved expenses. With an HRA debit card, you dont have to pay out of pocket and file for reimbursement. Its a win-win for you and your employer since this greatly reduces the amount of claims filing and processing.
HSA Debit Card
Like an FSA, HSAs can also be linked to a debit card. An HSA debit card can be particularly useful for those who enjoy rollover at years end, which can result significant account growth. You can find specialty online merchants like mynewextsetup.us, which sells only HSA eligible items. Many HSA providers also have an online receipt storage vault where you can store electronic versions of claims-related documents for self-certification.
In addition to FSAs, HRAs, and HSAs, theres another employer-benefit account that can be linked to a debit card: a Transit account. With a Transit debit card, you can pay for bus, subway, and taxi fare, cover parking expenses, and more.
Need to Know!
If you have an employer-sponsored benefits debit card for your account(s), you cannot use it at an ATM to withdraw cash.
For more information about your benefits debit card, or to find out if your company offers them, contact your HR department.
Top 10 reasons to use health savings accounts
Youve probably heard of health savings accounts (HSAs), and you may have wondered if one would be a good fit for you. You arent alone.
According to a survey released in , approximately 30 million Americans have chosen to use a health savings account coupled with a high-deductible health plan (HDHP) to pay for current and future healthcare costs. More than half of American workers with employer-sponsored health coverage were enrolled in HDHPs as of (some people have an HDHP but opt not to open an HSA; youre allowed to contribute to an HSA if you have HDHP coverage, but are not required to do so).
HSAs have increased in popularity since their debut in Understanding the increase in enrollment isnt difficult when one takes a closer look at how HSAs work and the impressive array of benefits they offer to people willing and able to use them.
Who can utilize HSAs?
In order to contribute to an HSA, you need to be covered under a high-deductible health insurance plan, either obtained through your employer or purchased on your own. The majority of large employers offer an HDHP option (70% did so in ), and HDHPs are available for purchase in the individual market nearly everywhere in the country. (That means you can have an HDHP and HSA even if you buy your own health insurance. An employer doesnt have to be involved.)
Once youre enrolled in an HDHP, you can open an HSA (or sign up for the one your employer uses) and begin making contributions. And if youre on the fence about whether its the right move for you, here are some things to keep in mind:
1. HSAs offer a triple tax advantage
The HSA is a rare breed in terms of tax-advantaged accounts:
- The money you put into your HSA is pre-tax.
- While the money is in your HSA, theres no tax on investment gains or interest earned in the account.
- And then when you withdraw the money, its still tax-free – as long as you use it to pay for qualified medical expenses.
Contributing to your HSA reduces your ACA-specific modified adjusted gross income, which is important to keep in mind if you’re buying your own coverage in the health insurance marketplace/exchange. The higher your ACA-specific MAGI, the smaller your premium subsidy will be (normally, theres an income cap for subsidy eligibility, equal to % of the poverty level; thats been eliminated for and as a result of the American Rescue Plan). You might find that an HSA contribution makes you eligible for a larger premium subsidy. Here’s more about how this works.
2. Paying medical expenses with pre-tax dollars
Once youve put money in your HSA, you can withdraw it at any time to pay for a qualified medical expense. And qualified medical expenses go well beyond the out-of-pocket costs for services that are covered by your health insurance plan. They also include includes things like dental and vision costs, as well as products like sunscreen (SPF 30+), bandages, and lip balm.
If you dont have an HSA, you can only deduct medical expenses by itemizing your deductions on your tax return. And even if you itemize, you can only deduct medical expenses that are in excess of % of your income.
3. Your HSA can be a backup retirement account
If you withdraw money from your HSA before you turn 65 and youre not using it to pay for qualified medical expenses, youll have to pay income tax and a 20% penalty. (Dont do this unless its a dire emergency!)
But once you turn 65, that 20% penalty no longer applies. You can continue to use your HSA funds for medical expenses, avoiding taxes altogether on the withdrawals. But if you choose to withdraw the money for other purposes, youll just pay income tax. This is similar to how a traditional IRA works in terms of taxes. (Note that with a traditional IRA, you can start to withdraw money penalty-free at age , whereas with an HSA, you have to be )
And unlike traditional IRAs, youre not required to start taking money out of your HSA when you turn If you want to leave it in the account to continue to grow, you can do that.
4. Pre-tax contributions regardless of your income
Although you can think of your HSA as a backup retirement account, there is no income limit – on the low end or the high end – for deducting HSA contributions.
This is not the case for IRAs: Theres an income limit for Roth IRA contributions, and an income limit for being about to contribute pre-tax money to a traditional IRA if you also have a retirement plan at work. And both require you (or your spouse) to have enough earned income to cover the contributions.
But to contribute to an HSA, you just need coverage under an HSA-qualified high deductible health plan (HDHP) without any additional major medical coverage, and you cant be claimed as a dependent on someone elses tax return. Your income isnt a factor.
5. The money in your HSA continues to grow
With an HSA, theres no use it or lose it provision. This is one of the primary differences between an HSA and an FSA. If you put money in your HSA and then dont withdraw it, it will remain in the account and be available to you in future years.
6. and you can choose how your HSA grows
HSA funds can be kept in basic interest-bearing accounts – similar to a regular savings account at a bank or credit union – or, if you choose an HSA custodian that offers it, you can invest your HSA funds in stocks, bonds, or mutual funds.
Theres no single right answer in terms of what you should do with the money in your HSA before you need to use it. If youre planning to withdraw all or most of your contributions each year to fund ongoing medical expenses, an FDIC-insured institution might be the best choice. The account will likely only generate small amounts of interest, but it will also be protected from losses.
On the other hand, if youre looking at your HSA as a long-term investment and your risk tolerance is suited to the stock markets volatility, you might prefer to invest your HSA funds. Note that most HSA owners do not have their HSA funds invested. For some, this is a calculated decision based on their risk tolerance and their need to access the money in the near future. But for others, the account might serve them better if the funds were invested, but they simply dont understand the options available to them.
If you buy your own HDHP, you can select from any of the available HSA custodians. (Pay attention to fees, investment options, and expense ratios, as is always the case with investment accounts.)
If you have an HSA through your employer, you might be limited to using the HSA custodian that your employer has selected, at least as far as your employers contributions go. And HSA contributions made via payroll deduction are typically free of income tax and payroll tax. You cant avoid payroll taxes if you make your own HSA contributions outside of your employers payroll.
But youre free to establish a separate HSA on your own, and transfer money out of the HSA your employer selected, and into the one you picked yourself. The IRS considers this a transfer, instead of a rollover, so there are no limits on how often you can do this.
Ready to try out a Health Savings Account?
7. You can leave your job and take your HSA
If you have an HSA through your employer, the money in the account is yours. When you leave your job, you get to take the remaining HSA balance with you. This is another difference between FSAs and HSAs.
You can choose a new HSA custodian and transfer the money if you wish. There are no taxes on the HSA money you take with you when you leave your job, unless you withdraw the money and dont use it for medical expenses.
8. Deductibles arent necessarily higher than other plans
You must have a high-deductible health plan (HDHP) in order to contribute to an HSA. And its understandable that the term high-deductible makes people nervous. But the deductibles arent necessarily higher than the deductibles for non-HDHPs, and in some cases, theyre even lower.
For , IRS regulations require HDHPs to have deductibles of at least $1, for an individual and $2, for a family. But average deductibles for Bronze and Silver plans in the individual market are considerably higher than that. Among people who have employer-sponsored plans that include deductibles (about 85% do), the average deductible for a single employee is nearly $1,
And the maximum out-of-pocket limits for HDHPs are lower than the maximum out-of-pocket limits for other plans – a difference that is getting wider with each passing year. In , the HDHPs have to cap out-of-pocket costs at no more than $7, for an individual, and $14, for a family. In contrast, ACA regulations allow non-HDHPs in to have out-of-pocket limits as high as $8, for an individual, and $17, for a family.
So although HSA-qualified plans are officially high-deductible, they sometimes have deductibles and out-of-pocket limits that are lower than other available plans. Its possible to find HSA-qualified plans at the Bronze, Silver, and Gold metal levels if youre shopping for your own coverage.
And as time goes by, HDHPs may start to cover more services before the deductible, for people with certain chronic conditions. Until , HDHPs were limited to covering only preventive care before the deductible (ie, prior to the insured meeting the minimum deductible amount that the IRS sets each year), and the definition of preventive care was updated in to align with the preventive services that the ACA requires all non-grandfathered health plans to cover.
But in July , in response to an executive order that had been signed the month before, the IRS issued new guidelines for preventive care that can be covered before the deductible on an HDHP without forfeiting the plans HSA eligibility. Under the new rules, an HDHP can cover, pre-deductible, certain specific health care benefits for people with certain chronic conditions and the health plan can remain HSA-eligible (assuming it meets all of the other requirements for HSA-eligibility. For people with the following chronic conditions, these services can be covered before the deductible on an HDHP:
- Congestive heart failure or coronary artery disease: ACE inhibitors and/or beta blockers
- Heart disease: Statins and LDL cholesterol testing
- Hypertension: Blood pressure monitor
- Diabetes: ACE inhibitors, insulin or other glucose-lowering agents, retinopathy screening, glucometer, hemoglobin A1c testing, and statins
- Asthma: Inhalers and peak flow meters
- Osteoporosis or osteopenia: Anti-resorptive therapy
- Liver disease or bleeding disorders: International Normalized Ratio (INR) testing
- Depression: Selective Serotonin Reuptake Inhibitors (SSRIs)
Note that HDHPs are not required to offer any of these benefits pre-deductible, unless a state decides to require it on state-regulated plans. These are benefits that go above and beyond the federally-required preventive care services, so whether to offer these services pre-deductible will be up to each insurer. But offering them will not cause a plan to lose HDHP status, which would have been the case prior to July
9. Theres no deadline for reimbursing yourself from your HSA
When you pay a medical bill and you have an HSA, there’s nothing that says you have to pull money out of your HSA to cover the medical bill. And there’s also no time limit on when you can reimburse yourself. As long as the medical expense was incurred after you established the HSA, and you didn’t take it as an itemized deduction, you can reimburse yourself years or decades later — after letting your HSA funds grow in the meantime.
So imagine that you’re contributing to your HSA each year, and also spending a few hundred or a few thousand dollars each year in medical expenses. You pay those bills from your regular bank account, keeping careful track of how much you pay and retaining all of your receipts.
Now let’s say that you decide you want to retire a few years early, before you can start withdrawing money from your regular retirement account. At that point, you can gather up all of the receipts from all the medical expenses you’ve paid since you opened your HSA, and reimburse yourself all at once (this is why it’s so important to keep your receipts — if you’re ever audited, you’ll need to be able to show that the amount you withdrew from your HSA was equal to the amount you had paid in medical bills over the years).
The money you withdraw is still tax-free at that point, since all you’re doing is reimbursing medical expenses (again, be careful not to withdraw more than youve spent in documented medical expenses; if you do, youll have to pay income tax and a 20% penalty on the excess withdrawal). But because you waited a few decades to reimburse yourself, you’ve given the money in your HSA many years to grow, tax-free, resulting in a potentially larger stash of funds.
Your HSA can be your long-term care fund
If youre healthy and dont have much in the way of medical expenses, you can think of your HSA as a really long-term investment. Youll have to stop contributing to it once youre enrolled in Medicare, but the money thats already in the account at that point can continue to grow from one year to the next during your retirement.
You might find that you want to use your HSA funds, tax-free, to pay Medicare premiums. (Thats Part A if youre not eligible for premium-free Part A, as well as Part B and Part D. You can also pay Medicare Advantage premiums with HSA funds, but you cannot pay Medigap premiums with tax-free HSA money.) Or you might need the HSA funds to cover out-of-pocket medical expenses during retirement.
But if you end up needing long-term care, the cost is likely to dwarf the out-of-pocket medical expenses you had earlier in your retirement. Medicare doesnt cover long-term care, and Medicaid only steps in if your income is low and you have exhausted almost all of your assets.
You can buy private long-term care insurance, but some people opt to treat an HSA as an investment earmarked for potential long-term care bills incurred late in life. If you dont end up needing long-term care, your HSA can be passed on to your heirs, similar to a retirement account.
Clearly, there are a lot of advantages to an HSA. If youre enrolled in an HDHP, its definitely in your best interest to set up an HSA and fund it. And if you dont currently have HDHP coverage, its well worth considering as a future option.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since She has written dozens of opinions and educational pieces about the Affordable Care Act for mynewextsetup.us Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
What’s the big deal? Why is an HSA beneficial?
HSAs provide taxpayers with a great way to reduce their tax bill and to save for the inevitable healthcare expenses. Whether you itemize or take the standard deduction, you can deduct all the contributions to your HSA, except those made by your employer.
Contributions made through a so-called “cafeteria plan” may also be excluded from your income. A cafeteria plan - sometimes called a Section Plan - refers to a selection of certain tax-advantaged benefits that employers allow qualified employees to choose from.
Certain HSAs allow you to invest the funds so that they can grow in index funds and ETFs. These earnings on your HSA contributions will also grow tax-free. As long as you use your HSA funds to pay qualified medical expenses, you do not have to pay any taxes.
For instance, say you contributed $3, on your HSA and the fund earned $ during the year. If your effective tax rate is 32% and you didn’t receive the tax benefits of the HSA, you would have paid $1, on that amount in income tax and $30 in capital gains tax (on the $ capital gain). Instead of using that money to pay the IRS, you can keep it in your HSA and use it for healthcare expenses.
Moreover, HSAs are portable. If you change jobs or become self-employed or unemployed, your HSA stays with you. It is not “use it or lose it.”
You can make the maximum HSA contribution for that year as long as you become eligible on the first day of the last month of your tax year (which for most taxpayers is December 1).
Purdue HSA Medical Plans
Employees who elect any of Purdue's Consumer-Driven Health Plans (CDHP) Premier, Standard, or Limited may be eligible to participate in an HSA a bank account set up in the employee's name to which Purdue contributes funds that may be used for eligible medical, prescription, over-the-counter, vision, and dental expenses incurred by the accountholder as well as their eligible dependents (e.g., spouse, IRS-qualifying child one they can claim on their taxes) during their HSA coverage period.
HSAs offer a triple-tax benefit:
- You can contribute to them on a pre-tax basis (lowering your taxable income).
- Your balance grows tax-free interest over time as it is a true savings account.
- You can make tax-free withdrawals and distributions to cover qualified medical expenses.
These funds roll over from year to year with no limit and the account follows the accountholder, even if they leave Purdue employment. Once a certain balance is reached, funds may be invested. Additional benefits to having an HSA are summarized here, in "The Anatomy of an HSA".
Are you eligible for an HSA?
Enrollment into a Purdue CDHP does not guarantee your eligibility for an HSA - there are additional IRS rules which may impact you. To get individualized guidance through these rules, please use our Interactive HSA Tool.
You may also refer to a quick HSA Eligibility Checklist.
Employees who are already 65 or who will turn 65 during the plan year should note that special rules apply to anyone who draws Social Security benefits and/or is covered by Medicare. Please take a few minutes to watch this video which walks you through your choices and what they mean for your Purdue health coverage and HSA, Thinking about Medicare?
Note: The information from the Interactive HSA Tool does not constitute tax or legal advice. If you have specific questions about the implications of an HSA for yourself, you are encouraged to seek professional tax or legal counsel.
If you are not eligible for an HSA, this does not impact your ability to enroll into a Purdue CDHP only into an HSA. Purdue offers Health Reimbursement Arrangements (HRA) for those who are not eligible for an HSA for any reason.
Customer Identification Program (CIP)
Before you can access your HSA funds, HSA Bank is required to validate your identity through a Customer Identification Program, or CIP, process (all banks are required by federal regulation to do this when a person is attempting to open an account).
Typically, your identity is verified with no issues. Occasionally, however, more information is needed to further verify your identity. Most often this occurs when there has been a recent change in your name or address. In this case, HSA Bank will reach out up to three times to request two unique forms of identification which must come directly from you. This documentation can be submitted to HSA by mail, fax, or by uploading to their secure website. The details of what is needed and where to send it will be found in the letters from HSA Bank if you fail the CIP process or you can call HSA Bank using the number on the left side of the page.
You will not be able to access your HSA funds until you have pass the CIP process. Additionally, if the requested documentation is not received by HSA Bank within 60 days, your account will be closed and any contributions made to it will be returned over time (based on the contribution date), less taxes. If this happens, you will need to take extra steps to reopen the account, must pass CIP, and any missed contributions from Purdue would only apply going forward, beginning with the date the account is reopened. Questions should be directed to HSA Bank at
Their first validation begins with a physical residential address; therefore, if you've only listed a P.O. Box address in our system, you will need to update your address before your account can be opened.
HSA Contributions & Contribution Limits
The contributions and limits shown below assume you are eligible for the HSA all year. If not, the amounts would be prorated. Changing plan tiers midyear (i.e., from family to individual) will also impact your contributions and limits.
Purdue Base Contributions
Purdue will make contributions to your HSA based on your medical plan enrollment. This is done incrementally in conjunction with your pay schedule monthly (for fiscal or academic year pay schedules) or bi-weekly, and academic-year staff do not receive contributions in the months of May through August when they don't receive full pays.
Note: For those enrolling in an HSA midyear, these contributions will be prorated based on your remaining number of pays in the year.
The following amounts will be reflected in the "HSA Savings ER" line under the "Purdue-Paid Benefits" section of each of your pay statements:
- $ for employee-only coverage
- $ for family coverage (employee + one or more)
Learn how you can earn additional HSA funds through our Healthy Boiler program.
Optional Employee Contributions
You can elect to set aside dollars on a pre-tax basis through payroll deductions for your HSA as long as the total combined contributions from any source (e.g., your deductions, Purdue base, Healthy Boiler wellness program) do not exceed the IRS contribution limits below. You are encouraged, but not required to make your own contributions to an HSA and may change your payroll deductions at any time during the plan year without a Qualifying Life Event (changes may take pay periods to reflect on your paycheck).
IRS Contribution Limits
You are responsible for assuring that total contributions to your HSA from all sources combined do not exceed the limits below. As a reminder, these assume you are eligible for the HSA all year. If not, the amounts would be prorated. Changing plan tiers midyear (i.e., from family to individual) will also impact your limits. Your age may also affect your limits. See Catch-Up Contributions in the next section.
Spouse tip: If your spouse also receives or makes contributions to an HSA through Purdue or another employer, you must collectively adhere to the contribution maximum family limit.
$3, for employee-only coverage or $7, for family coverage (employee + one or more)
- $3, for employee-only coverage or $7, for family coverage (employee + one or more)
Federal rules also allow what are called catch-up contributions to an HSA. If you are age 55 or older, or will turn 55 any time during the plan year, you may contribute an additional $1, above the IRS limits in the previous section.
Spouse tip: Eligibility to make catch-up contributions is based on the accountholder's age not on their spouse's age. If the accountholder and the spouse are both 55 or older, the accountholder may still only make a $1, catch-up contribution.
For detailed instructions on managing your account online (e.g., check your balance, reimburse yourself for eligible expenses paid out-of-pocket, pay a bill, link your bank account) at mynewextsetup.us, review HSA Bank's Member Website Guide. You may also access your account on the HSA Bank mobile app.
Interest and Investment Opportunities
Health Savings Accounts are interest-bearing accounts. With HSA Bank, you have the opportunity to potentially increase your funds by taking advantage of their investment options. For more information, please review HSA Bank Self-Directed Investment Options.
Tax Forms Information
HSA Bank tax forms will be made available online at mynewextsetup.us from the View Statements link on the Message Center tab and you will receive an email from HSA Bank when they are posted. They will not be mailed out automatically unless you opt into receiving paper copies. To opt in, log into HSA Bank, scroll down to the Quick Links box, and click Statement Preferences. In the Statements section, place a checkmark under "Paper" in the HSA Tax Documents row. You may also call HSA Bank at to request a paper copy. Be sure to verify your address on file with Purdue is up to date first.
- Posted by January 31
- Reports funds distributions (You will not receive this form if you did not withdraw/spend funds from your HSA in the prior tax year)
- Required to report on IRS form when filing tax return
- Posted in May
- Reports contributions to your HSA made in the prior tax year along with your HSA balance as of the end of December in the prior tax year
- Informational only and is not required to file with your tax return
HSA Frequently Asked Questions
The IRS regulates the requirements for health plans to be eligible for an HSA and the rules associated with participating in/receiving contributions to an HSA. Enrollment into any of Purdue's Consumer-Driven Health Plans (CDHP) - Premier, Standard, or Limited does not guarantee your eligibility for an HSA and thisweb pageis not intended to provide all the information you need to make a decision on whether or not an HSA is right for you. You may want to consult with a tax advisor.
For questions specific to the Healthy Boiler Wellness program (earnings, timing of payment), visit the HSA/FSA/HRA section of the Healthy Boiler FAQ.
For specifics on the features and functions of managing your HSA online, please refer to the HSA Bank Member Website Guide.
To receive contributions to an HSA with Purdue, one requirement is enrollment in one of the Consumer-Driven Health Plans Premier, Standard, or Limited. Additional rules around eligibility are complex. To help determine whether you may be eligible for an HSA, please use our Interactive HSA Tool.
After your HSA is established with Purdue, if you lose your eligibility to receive contributions to it mid-year, you must decline the account in order to stop your employer contributions. If you are losing eligibility by enrolling in a non-HSA-qualifying medical plan, you will not see the option to enroll in an HSA and therefore won't need to decline it.
In either case, your HSA will become a retail account (rather than an account connected with an employer) and you will become responsible for the monthly account maintenance fee. When this happens, you will receive a letter from HSA Bank regarding the change along with an updated Fee Schedule.
If you are no longer working at Purdue, you will not be able to make or receive pre-tax contributions to your HSA. Your HSA funds will remain yours to keep and you can still use them free of taxes and penalties, provided they are spent on eligible expenses. Your HSA will become a retail account and you will become responsible for the monthly account maintenance fee. When this happens, you will receive a letter from HSA Bank regarding the change along with an updated Fee Schedule.
The IRS prohibits individuals from participating in both an HSA and a health care FSA or HRA (allows reimbursement for eligible medical, prescription, over-the-countervision, and dental expenses, like the HSA). The only FSAs Purdue offers which do not affect your HSA eligibility are Limited Purpose FSAs (eligible vision and dental expenses only) and Dependent Care FSAs (eligible childcare expenses only).
Spouses may not each enroll in an HSA and a health care FSA or HRA at the same time. Therefore, if your spouse is enrolled in a health care FSA or HRA, you would not be eligible to enroll in an HSA.
Account Basics and Contributions
An HSA is an FDIC insured bank account with a triple tax advantage in which eligible employees may participate. First, your contributions to the account are pre-tax, second, withdrawals and distributions from the account are tax-free when the funds are used properly, and third, interest earned on the funds in the account along with any growth and interest following investment is tax-exempt.
When you enroll in an HSA, Purdue will send your information to HSA Bank.
In order to open a bank account, HSA Bank is required by law to validate a person's identity. Their first validation begins with a physical residential address; therefore, if you've only listed a P.O. Box address in our system, you will need to update your address before your account can be opened.
Once your account is opened, the rest of your data is verified through HSA Bank's Customer Identification Program, or CIP, and your account is ready to receive contributions. Occasionally, however, more information is needed to further verify your identity. Most often this occurs when there has been a recent change in name or address. In this case, HSA Bank will reach out to request verifying documentation from you directly.
It is possible to incur fees with your HSA (e.g., by ordering additional debit cards after the first two, over-drafting). You can view a summary of these fees online through your HSA Bank account by logging into HSA Bank, clicking Resources from the menu bar, then clicking View Fee Schedule.
This is done incrementally in conjunction with your pay schedule monthly (for fiscal or academic year pay schedules) or bi-weekly, and academic-year staff do not receive contributions in the months of May through August when they don't receive full pays. The amount will be reflected in the "HSA Savings ER" line under the "Purdue-Paid Benefits" section of your pay statement.
During the annual open enrollment period in the fall, when electing an HSA, you will have the option to make your own contributions and can enter the annual amount you'd like to contribute. Purdue will divide that amount by your number of pays, deduct it incrementally from your pay before taxes, and submit those funds to HSA Bank for deposit.
The number of pays for a full year are as follows: 12 for the fiscal payroll schedule, 8 for the academic payroll schedule, and 26 for the bi-weekly payroll schedule. Those on the academic payroll schedule will not have HSA deductions taken the months of May and August.
You are encouraged to contribute to your HSA via payroll in order to maximize your tax benefits as that way you wouldnt pay federal income or Social Security and Medicare payroll taxes; however, if you are unable to contribute via payroll or would prefer not to lower your IRS-reported taxable income which may impact your future Social Security benefits, you are allowed to make post-tax contributions to your account. This way you will get back federal income taxes when filing your taxes, but you will not get back the payroll taxes.
You have until the tax-filing deadline each year (4/15) to do one of the following:
- Complete the HSA Contribution Form for HSA Bank and mail it to them with a check. Note: Be sure to mark the appropriate contribution tax year. For example, if you are contributing to your account in , you will check the box for Prior Year.
- If your HSA is linked with your personal bank account, you may do an electronic funds transfer. Instructions on electronic funds transfers and on linking a bank account to your HSA are found in the HSA Bank Member Website Guide. If you are contributing outside of the current year, be sure to select the applicable tax year for the contribution.
As a reminder, you are responsible for ensuring the total contribution amount that goes to your HSA each year does not exceed the IRS maximum for that year Purdue does not track contributions made to your HSA outside of payroll. Questions around this process can go to HSA Bank at () and questions around taxes should be directed to a tax advisor.
For , a person with individual/self-only medical coverage may have HSA contributions up to $3,, and a person with family/self-plus-one-or-more-dependents medical coverage may have HSA contributions up to $7,
Funds contributed in excess of your IRS contribution limit and the earnings on those funds are subject to penalty and tax unless you take one of the following additional actions. It is recommended you speak with a tax advisor.
- Pay the excise tax on the excess contribution when filing your Federal Income Tax Return for the prior year. The funds would remain in your HSA and count as a current-year contribution; therefore youd need to make sure you subtract the excess amount from the following years IRS HSA limits to determine the maximum amount you can contribute that year to avoid further penalties.
- Complete an HSA Excess Contribution Removal Form and return it to HSA Bank by the tax-filing deadline. The excess amount will be removed from your account and refunded to you, less taxes. Questions on this process may go to HSA Bank at .
Yes. If you reach a minimum balance of $1, in your HSA, you can transfer funds above that amount to an investment account at HSA Bank. There are account fees and additional expenses associated with the investment accounts, depending on which option and investments you choose.See "Interest and Investment Opportunities" earlier on this page for more information.
If you are still participating in an HSA while actively employed with Purdue at age 65 and have not enrolled in Medicare, you may continue to make or receive contributions to your HSA.; however, when you retire and enroll in Medicare after age 65, you are retroactively entitled to Medicare for up to 6 months, but no sooner than the first of the month in which you turned This means any HSA contributions made to your account after your Medicare entitlement date will be considered taxable income. Additionally, a mid-year loss of eligibility will affect your contribution limits. It is recommended to consult a Tax Advisor for more information.
Note: Drawing benefits from Social Security at 65 and up requires enrollment into Medicare Part A which affects your ability to make or receive contributions to your HSA.
Upon turning 65, you may use your HSA funds on Medicare Parts A, B, and D premiums. Additionally, if you use or withdraw your HSA funds for non-eligible health care expenses, you will not be subject to the 20% tax penalty, but will be responsible for paying taxes on the amount spent.
You are asked to designate your beneficiary when you first log in online at mynewextsetup.us To update, log in and click View Account Details under your Health Savings Account, then click My Profile under the My Health Savings Account menu on the left and you will see the Beneficiaries tab on the following page. You may also complete the HSA Designation of Beneficiary Form and return it to the address at the bottom of the form.
If you are married, your spouse may become the owner of the account and can use it as his/her HSA. Another option is that the account may no longer be treated as an HSA, and will be passed along to your beneficiary or become part of your estate. For specific details on this subject, consult a tax advisor or estate attorney.
Enrollment in an HSA requires you to complete IRS form when you complete your taxes on an annual basis. Be sure to discuss this with your tax preparer.See "Tax Forms Information" earlier on this page, just before the HSA FAQs for more information.
Accessing Your Funds
HSA Bank will issue you a debit card for your HSA or will sync your HSA to your HSA Bank card if you already have one from other account. You can also set up payments to a health care provider, order checks, and request reimbursements from your HSA to yourself from the member portal at HSA Bank.
If you incur out-of-pocket expenses and do not have funds available in your HSA to cover those costs, you will need to pay by other means. You can reimburse yourself after each pay period when funds are deposited in your HSA until you are paid back in full.
When you use your card at a vision or dental office, funds will first be pulled from your Limited Purpose FSA until it is exhausted and then it will use your HSA funds. This distinction is made through the provider's merchant category code (number assigned to businesses based on their services offered) which is recognized when your card is used. When you use your card anywhere else, your HSA funds will be spent.
Only the following premiums are considered eligible expenses for which you can use your HSA funds: COBRA continuation of health care coverage; health care coverage while receiving unemployment compensation; long-term care coverage (up to the annual amount allowed by age); and for those age 65 and older, Medicare health care coverage including Medicare Parts A, B and D.
Health insurance premiums for coverage offered through an employer and premiums for Medicare supplemental plans, such as Medigap are not considered eligible medical expenses.
What can I use the money in my HSA for?
You can use the money in your HSA for qualified medical expenses not covered by your insurance for yourself, your spouse of any of your qualified dependents.
Qualified medical expenses may include payments for medical and dental services such as doctor’s fees, laboratory fees, prescribed medicines, and necessary surgeries. Expenses for purely cosmetic reasons such as facelifts and health transplants are not typically considered qualified medical expenses.
Take note that you have to keep your receipts for at least three years. Unless the IRS suspects fraud, they will not typically request records beyond three years.
If you withdraw funds for any purpose other than for qualified expenses, the distribution becomes taxable. In addition, you’ll have to pay a 20% penalty.
How do I use the money in my HSA?
Method 1 - Debit Card
A health savings account usually comes with a debit card that is often a Visa or common credit card. You can use your HSA debit card to pay the pharmacy or your medical provider. You may also use your debit card to pay qualified medical expenses in cash or pay through online fund transfer.
Method 2 - Reimbursement
You may request reimbursement for medical expenses you paid using your personal funds. Your HSA will mail you a check or do a direct deposit to your account. There is no time requirement to request reimbursement from your HSA provider. If the funds in your debit card are not enough to cover your medical expense, you can claim reimbursements for eligible expenses you paid with your personal funds.
You should keep all receipts related to your medical expenses to prove that your HSA funds were used for qualified expenses in case of an IRS audit.
Can I open an HSA outside of my employer or does it have to be through my workplace health insurance?
Yes, you can open an HSA without the help of your employer as long as you have an HDHP. In this case, you have to pay after-tax dollars on your HSA. But you can recover the taxes you paid when you submit Form HSA Contributions and Deductions and claim the HSA deduction in your annual tax return.
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