Health Savings Accounts
The Health Savings Account (HSA) allows you to contribute pre-tax dollars to pay for health care expenses, such as deductibles, co-pays and co-insurance. "Pre-tax" means you do not pay federal income or FICA taxes on the amount of money you put in the HSA. Annual contribution limits are set by the IRS. For 2019, they are $3,500 for individual coverage and $7,000 for Family coverage. If you are age 55 or over, you can contribute an additional $1,000 per year.
You can also carry any unused balance forward from year to year to use for future health care expenses. Your health savings account earns interest too, which helps your account balance grow over time.
The HSA offers unique benefits:
- Triple tax savings — contributions, any earnings, and distributions are tax free when used to pay for qualified medical expenses (established by the IRS)
- Any unused money in your HSA carries over each year and is yours to keep, even if you leave Vanderbilt
- For 2020, Vanderbilt will provide a contribution into your HSA to help boost your savings. (If you do not open your HSA and agree to Fidelity's Terms and conditions within 60 days of the contribution dates (January 1st & July 1st), you will forfeit Vanderbilt’s contribution.)*
- You decide when and how much of your HSA funds to use for your qualified medical expenses now, or save and invest for future needs, including during retirement
*You must be enrolled in the CDHP on Jan 1 to receive the Vanderbilt HSA January contribution and July 1 to receive the July contribution.
If you want to enroll in an HSA, you must enroll in the CDHP.
- Medicare-eligible employees cannot participate in the HSA, if enrolled in any form of Medicare.
- Dependents can be covered on the CDHP through age 26, but cannot use HSA funds to cover expenses unless they are tax-qualified dependents
Contributing to the HSA
- Determine how much you want to contribute to your HSA. When you begin to think about how much to contribute keep in mind the IRS limit includes the Vanderbilt seed money (for fully benefits-eligible employees) and any Go for the Gold dollars earned in the previous year.
- If you are over age 55, you can make a catch-up contribution of $1,000.
- Need help? Check out our HSA Contribution Limit Worksheet
NOTE: Tax implications for employees that are not enrolled int he CDHP all year: The maximum annual contribution limit is based on your age and coverage tier (i.e., individual or family), as well as on when you become enrolled in an HSA-eligible health plan. Normally, for eligible individuals who enroll in the CDHP as of the first of the plan year, the HSA contribution is prorated based on the number of months during the year a person is covered by the CDHP as of the first day of the month. Individuals enrolled in an HSA-eligible plan after the beginning of the plan year may contribute up to the statutory maximum annual contribution amount as long as they are eligible individuals for a full 12-month period following such month. If an individual fails to meet these criteria, the maximum annual contribution amount must be prorated based on the number of months he or she is an eligible individual, and any amount above such prorated amount is includes in the individual's gross income and subject to a 10% tax. Please speak to your tax adviser specialist for guidance.
There are multiple ways to use your HSA to pay for qualified medical expenses including:
- Debit card – Your HSA debit card can be used to pay for qualified medical expenses at the doctor’s office, clinic, or pharmacy.
- Bill Pay – You can pay your bill online using the bill paying service to pay health care providers directly.
- Reimbursement – You can reimburse yourself for an expense that you paid for out of pocket
Changing your HSA Contribution
- Online using the My VU Benefits. Log in with your VUnetID and ePassword and then click on "Life Events"
- Go to “Health Savings Account Change” and click Enroll
- Enter the date
- Agree to the disclosures
- Enter the amount per year or per deduction
- Select how you would like your contributions deducted from your paycheck.
- Select save and continue
This change will be effective the first of the following month.
If your employment with Vanderbilt ends, you take your HSA with you. The account and money in it is yours to keep.
- HSA vs. FSA Article
- HSA Allowable Health Care Expenses
- HSA Contribution Limit Worksheet
- HSA - Triple Tax Advantaged Flyer
- HSA - 4 Things to Know Flyer
- HSA - People Like Me Flyer
- Fidelity’s HSA Guide
- Fidelity's HSA Checklist
Benefit Express – to make changes to contribution amount