Health Savings Account - Administered by Optum Bank
Combines a high deductible health plan with a voluntary tax favored savings account. You pay lower medical premiums in exchange for a higher deductible and you can make pre-tax contributions into your HSA Savings Account, through Optum Bank to pay for eligible medical expenses.
At the time of hire, you will make your HSA Savings Account elections online when you make your other benefit selections. By clicking the Empower HSA National button and entering your annual election amount, you are agreeing for SPPS to open and administer/maintain an Optum Bank, Inc. (“Bank”) Health Savings Account on your behalf and there are no forms needed to be filled out.
Elections do not carry forward from year to year. Elections must be made during Open Enrollment for deductions to begin the first paycheck in January. Deductions will be taken from each paycheck on a pre-tax basis, and deposited into your HSA Savings Account administered by Optum Bank. If you do not make an HSA Savings Account Election during Open Enrollment, you are still able to enroll, however deductions will begin the following month from the date the HSA Savings Account Election Form is received in the Benefits Office.
Ten month employees do not have deductions during the summer months. The HSA Savings Account MUST be re-elected during Open Enrollment for deductions to begin in January. No changes or new accounts will be created in November or December of each year.
Please note: An account with Optum Bank will be set up by Saint Paul Schools and additional information may be requested from Optum Bank Once your account is set up, Optum Bank will send you a debit card for use against your accumulated HSA funds.
Main benefits of an HSA Savings Account:
- Tax savings- you reduce your taxable income by making pre-tax contributions. Savings grow tax-free and withdrawals for eligible medical expenses are also tax-free.
- Flexibility- you can use your HSA funds for current medical expenses or save for future needs like COBRA premiums or long term care insurance. You can even withdraw HSA funds for non-medical expenses (however tax penalties may apply for that).
- Portability- the money in your HSA Savings Account is yours - even if you leave SPPS before you retire. You take your HSA Savings Account with you, and you can also assign a beneficiary so your funds are never wasted.
HSA Savings Account Facts:
- You own your HSA Savings Account and you determine how funds are spent.
- You can voluntarily contribute money (up to annual IRS limit) to your HSA Savings Account on a pre-tax basis through payroll deductions.
- Rather than having pharmacy copays, in the HSA plan you pay the full (discounted) cost of prescription drugs, which are applied against your deductible. Funds in your HSA Savings Account can be used to pay for prescriptions.
- To pay for eligible health care expenses, present your Optum HSA debit card to your provider, and money will be deducted directly from your HSA Savings Account balance.
- Remaining HSA Savings Account funds not used for eligible health care expenses in the plan year may be rolled over to the following year for future health care expenses.
- You may not borrow against future contributions; only the funds existing in your account at any given time are available for use.
- Unused HSA Savings Account funds always remain with you, even if you leave SPPS, as you are the one who contributed to the account.
- There is a monthly administration fee for Optum Bank to carry your account and process your claims, which is automatically deducted from your fund account.
- The HSA Savings Account is an interest-bearing deposit account and provides you with mutual fund investment options.
- Withdrawals are not taxed as long as they are used to pay for qualified health care expenses. It is up to you to keep the supporting records for the IRS if you used the funds to pay qualified health care expenses. [If you use your HSA funds for non-qualified health care expenses, you are required to report your withdrawal as taxable income and pay a tax penalty.]
IMPORTANT NOTE: If you are covered under a Health Savings Account you cannot participate in the medical reimbursement for flex spending – you would only be able to participate in the dependent care reimbursement program. (However, if you elected the HSA Medical plan as your insurance coverage but do not have an HSA Savings Account attached to it, you are eligible to participate in the flexible spending reimbursement program. It is the HSA Savings Account, not the high deductible health plan that prohibits you from participating in flex spending medical reimbursements.)