Health Savings Account
Administered by BenefitWalletTM
If you enroll in either the $2,800 or $5,000 High Deductible Health Plan (HDHP), you will be able to take advantage of a special tax-savings feature called a Health Savings Account (HSA). The HSA is a 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, reducing your taxable income. Contributions, investment earnings, and distributions for qualified healthcare expenses are exempt from federal income tax, FICA (Social Security and Medicare) tax, and state investments (in most states).
You can contribute up to a maximum of $3,550 for an individual and $7,100 for a family for 2020. If you are age 55 or older you can contribute an additional $1,000. 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.
IMPORTANT: The HSA is an important feature since both the $2,800 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)
Please review the Summary of HSA Fees and the Summary of HSA Rates. SMU pays the $2.25 HSA monthly account fee on behalf of employees currently enrolled in either the $2,800 or $5,000 high deductible health plan (HDHP). All other fees are the responsibility of HSA participants.
- If you are no longer enrolled in one of the HDHPs because you have enrolled in another SMU medical option or in a medical plan outside of SMU (e.g., through your spouse’s employer), you will be responsible for paying the $2.25 fee.
- If you leave SMU, you will continue to have access to your HSA account but you will be responsible for all fees.
Who is Eligible
You can participate in the HSA only if you enroll in the $2,800 or $5,000 High Deductible Health Plan (HDHP). 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 $2,800 or $5,000 HDHP.
Coverage for Adult Children
While the Patient Protection and Affordable Care Act extended medical coverage for adult children up to age 26, the IRS did not change its definition of a dependent for health savings accounts. This means that an employee whose 24-year-old child is covered on his HSA-qualified High Deductible Health Plan (HDHP) is not eligible to use HSA funds to pay that child's healthcare expenses.
If account holders can't claim a child as a dependent on their tax returns, then they can't spend HSA dollars on services provided to that child. According to the IRS definition, a dependent is a qualifying child (daughter, son, stepchild, sibling or stepsibling, or any descendant of these) who:
- Has the same principal place of abode as the covered employee for more than one-half of the taxable year.
- Has not provided more than one-half of his or her own support during the taxable year.
- Is not yet 19 (or, if a student, not yet 24) at the end of the tax year or is permanently and totally disabled.
How to Set Up And Use Your Account
Once you enroll, you will receive account information and forms from BenefitWallet at your home. You must complete and return these forms to BenefitWallet before funds can be deposited.
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 BenefitWallet HSA Contact Center at 1-877-635-5472 to sign up for auto-adjudication.
What if I am a new employee and become eligible to contribute to an HSA mid-year? What is my maximum contribution?
You may make the full year's contribution into the HSA, even if you are eligible for only part of the year. If you make a contribution for the full year when you only had partial year HSA-eligibility, you must remain HSA-eligible through the last month of the following calendar year to avoid tax and penalty.
Can I Change My HSA Contributions During the Plan Year?
If you elect the HSA as a new employee or during Open Enrollment, and later decide you want to increase, decrease or cancel your annual contribution amount, you may do so by sending a request to email@example.com. If you did not elect the HSA as a new employee or during Open Enrollment, you must wait until the next Open Enrollment to do so.