Employees who are enrolled in one of LCC's high deductible medical insurance plans can redirect a portion of their pay through payroll deduction into a Health Savings Account (HSA) administered by HealthEquity. An HSA is a tax-favored account that allows employees to pay for eligible out-of-pocket health expenses with pre-tax dollars. By using pre-tax dollars to pay for eligible health expenses, an HSA gives employees an immediate discount on these expenses that equals the taxes they would otherwise pay on that money.
Read below for detailed information about this benefit:
Employees who are enrolled in one of LCC's high deductible medical insurance plans, also referred to as high deductible health plans (HDHPs), are eligible to contribute to the Health Savings Account (HSA). However, employees can be disqualified from contributing to the HSA if, for example, they are enrolled in plans that are not HSA-compatible (e.g. Medicare or Tricare) or they can access funds in a full medical Flexible Spending Account (FSA). The Internal Revenue Service (IRS) Publication 969 contains more details on qualifying for an HSA.
Employees can use the funds in the account on themselves and on eligible dependents, as defined by IRS Publication 969, which includes a spouse and all dependents who can be claimed on the employee's federal tax return.
What is a Health Savings Account (HSA)?
The Health Savings Account (HSA) allows you to pay for certain out-of-pocket health expenses, such as doctor visits, dental and vision care, and prescriptions, with tax-free dollars. The money that is contributed into the HSA is deducted from pay on a pre-tax basis, decreasing taxable income. The funds, when spent on IRS-qualified health expenses, are also not taxed. The balance even grows with tax-free interest. Employees who enroll in one of LCC's high deductible medical insurance plans will receive a welcome kit from HealthEquity with information about the HSA and the option to contribute to the HSA up to the IRS maximum limit in a given taxable year. The advantage of an HSA is that the account’s balance of funds is employee-owned and rolls over from year to year, even if the employee changes medical plans or employers. HealthEquity even provides investment options for balances that reach a certain threshold.
Annual Contribution Limits
The annual contribution limits are determined by the IRS. An employee can contribute any amount up to the yearly limit, dependent upon the coverage level of their enrolled medical insurance plan and their age.
Year Individual Medical Plan Two-Person/Family Medical Plan 2021 $3,600 $7,200 2022 $3,650 $7,300 Members 55+ can contribute an extra $1,000
What types of eligible expenses can I use my HSA funds for?
The funds in your HSA can pay for expenses that fall under the IRS category of "medical expenses." Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses can be the products or services you usually pay for out of pocket such as items not reimbursed by insurance (i.e. deductibles and copays). Examples of eligible expenses are doctor visits, dental care, vision care, prescription medicines, over-the-counter medicines, menstrual care products, first aid supplies, and so much more! A complete list of eligible expenses can be found in the IRS Publication 502. You can also utilize HealthEquity's qualified medical expenses list as a reference to help determine whether an expense is eligible for HSA funds.
How do I pay for my eligible expenses?
When you go to the doctor's office, the doctor will bill your Blue Cross Blue Shield (BCBS) medical plan for your services. Once the bill has been processed, you'll receive an Explanation of Benefit Payments statement, or EOB, including any BCBS network discounts. Any out-of-pocket charges you may owe will appear on your EOB. You’ll receive a bill from your doctor for the out-of-pocket amount, which can be paid with HSA funds.
There are three ways to pay for eligible expenses:
- HSA CARD. When you visit a doctor, pick up a prescription, or need to pay for other eligible expenses, simply present your HSA debit card. Payments are immediately deducted from your HSA. Most providers will also accept the card over the phone, online, or written-in on the statement for payment. In order for your card to work, you must have the balance available in your HSA; no overdraft is available. The card will not work at ATMs and will only work at appropriate medical facilities. The card should always be run as "Credit" and no PIN is required.
- DIRECT ONLINE PAYMENT TO PROVIDER. After you have received an invoice from your provider and matched it with an EOB from your medical plan, you are ready to make a payment. You can use the HealthEquity member portal to set up a direct payment using the online payment tool. HealthEquity will send the payment to the provider and include all of the information necessary to apply the payment to your bill.
- REIMBURSEMENT. If you pay for eligible expenses out of pocket, you can reimburse yourself with funds from your HSA by submitting a reimbursement form (either by fax, mail, or online) to HealthEquity. You can choose to receive a reimbursement check by mail or to have the reimbursement deposited directly into your bank account. Forms are available online through your HealthEquity account portal. There is no deadline to reimburse yourself for an eligible expense you have paid out of pocket. You can do it next week, next year, or several years after the expense is incurred. Simply keep the documentation (receipt or EOB) of the expense, or upload it to the documentation library located on the HealthEquity member portal for safe keeping.
Important Note: Regardless of the means of payment, be sure to keep all receipts as documentation of your purchases or upload them to the documentation library in the HealthEquity member portal. You will need to be able to provide this documentation if you are audited by the IRS.
My Account Resources and Forms
Instructions for Updating HSA Contributions
Once an employee is enrolled in and coverage is effective for their LCC high deductible medical insurance plan, employees are able to start, change, or end their HSA contributions through Banner Self Service at any time.
BCBS / HealthEquity Account Portal
HealthEquity is an independent company supporting Blue Cross Blue Shield (BCBS) by administrating your HSA and providing HSA services. You can actually access your HealthEquity account through your BCBS member account. Register or log in to your BCBS member account from the mobile app or at BCBSM.com to check your account balances, recent activity, coverage information, deposits, withdrawals, eligibility, and much more.
- Go to BCBSM.com and log in as a member.
- Select My Coverage.
- Select Spending Accounts, then click Go to your health spending account
Frequently Asked Questions
HSAstore.com is an online marketplace with thousands of HSA-eligible products, such as sunscreen, bandages, blood glucose meters, blood pressure monitors, thermometers, and so much more! You simply create an account, as you would with websites like Amazon.com, and start shopping. If certain items require a prescription for eligibility per IRS regulations, they will have an "Rx" logo. Otherwise, items listed with a check mark are HSA-eligible and do not require a prescription.
Investing my HSA Funds
Once your HSA meets a certain threshold, you can invest in mutual funds to maximize your HSA earning potential.
Benefits Enrollment & Changes
When and how can I enroll in and make changes to my eligible benefits?
Contact your HR Benefits Team at LCC-HR-Benefits@star.lcc.edu