If you enroll in either the $2,500 or $5,000 Deductible PPO Options, you will be able to take advantage of a special tax-savings feature called a Health Savings Account (HSA). The HSA is a tax-free bank account used to help pay the cost of eligible out-of-pocket health care expenses. You will make contributions to your account through pre-tax payroll deductions. Withdrawals are not taxed as long as the funds are used to pay for qualifiied healthcare expenses.
IMPORTANT: The HSA is an important feature since both the $2,500 and $5,000 Deductible PPO options do not pay any benefits, with the exception of preventive care services, until you satisfy your deductible.
You can use the HSA to pay for health care expenses such as:
- Coinsurance (your share of eligible health expenses after the plan has paid benefits)
- Amounts above reasonable and customary charges for out-of-network services
- Out-of-pocket dental and vision expenses
- Prescription drug co-insurance (your share of eligible prescriptions expenses after the plan has paid benefits)
Who is Eligible
You can participate in the HSA only if you enroll in the $2,500 or $5,000 Deductible PPO Options. You are not eligible to contribute if:
- You are enrolled in Medicare (Part A, Part B, or Part D).
- You are covered by another medical plan (such as your spouse's plan) that does not qualify as a high deductible health plan.
- You or your spouse participates in a Health Care Flexible Spending Account (FSA) at SMU or at your spouse's employer.
Even if you do not contribute to the HSA, you cannot contribute to SMU's Health Care FSA if you are enrolled in the $2,500 or $5,000 Deductible PPO Options.
How You Contribute to the HSA
For 2013, you can contribute up to a maximum of $3,250 for an individual and $6,450 for a family. If you are age 55 or older you can contribute an additional $1,000. Your contributions are deducted from your paycheck on a pre-tax basis. The money is placed in an account where it earns interest after you contribute a certain amount.
Domestic Partners & HSA Contributions
If you are covering a domestic partner as a dependent on the SMU $2,500 or $5,000 Deductible PPO options, you can contribute up to the family maximum on a pre-tax basis. Your contributions can be used to reimburse yourself for eligible health care expenses incurred by your domestic partner.
If you are NOT covering your domestic partner as a dependent on the $2,500 or $5,000 Deductible PPO options, contributions made to the HSA cannot be used for any of your domestic partner's health care expenses.
How to Set Up And Use Your Account
Once you enroll, you will receive account information and forms from Mellon Bank at your home. You must complete and return these forms to Mellon Bank before using your account.
You will receive a debit card and a checkbook which can be used to pay for eligible expenses. You will not be asked to submit proof of your expenses for verification purposes as with a Flexible Spending Account. Keep documentation showing your HSA funds are used for eligible expenses in the event of a future IRS audit.
If you would like your out-of-pocket expenses, including deductibles, to be automatically debited from your HSA, contact the Mellon Bank HSA Contact Center at 1-877-635-5472 to sign up for auto-adjutication.
If You Have Money Left at Year-End
Any money left in your account at the end of the year remains there. It can be used to pay your health care expenses in future years, including expenses incurred after age 65. If you leave SMU, your HSA goes with you. There is no "use it or lose it" rule with a HSA.