When you enroll in the HDHP, you have the opportunity to open an HSA. The HSA is essentially a bank account with Optum Bank that allows you to save and pay for eligible health care expenses. The HSA is a great way to build up dollars to pay for your health care expenses today — or in the future.
HSAs function very similarly to a bank account but are dedicated to health care expenses. If you do not use all of the money, your account rolls over from year to year. You choose to "spend" or "save" these dollars to pay for your eligible medical, dental, prescription, or vision expenses. Similar to a 403(b), you can contribute to your HSA on a pre-tax basis up to IRS limits.
In 2016, you may contribute up to $3,350 (same as 2015) for individual coverage, or $4,350 (same as 2015) if age 55 or older; and $6,750 ($6,650 in 2015) for family coverage, or $7,750 ($7,650 in 2015) if age 55 or older, into the HSA.
This includes hospital services, prescriptions, dental, vision, and other eligible health care expenses. Note: federal law does not allow you to be reimbursed for expenses through an HSA for non-tax-qualified dependents. If you enroll a domestic partner in the HDHP, he/she must be a tax-qualified dependent in order to have his/her expenses reimbursed through an HSA. We suggest that you seek guidance from your personal tax advisor to confirm the eligibility of any dependents for whom you plan to take HSA distributions.
You can use the HSA to build additional income for health care expenses in future years — or retirement.
Even if you leave NYU, the funds in your HSA (both your contributions and any contributions from NYU) are yours to use for eligible health care expenses. Beginning at age 65, you can use your HSA funds for medical expenses not covered by Medicare.
When you enroll in the HDHP option and open an HSA, Optum Bank will provide you an HSA MasterCard to give you a convenient way to access your HSA funds when you need them. Simply use your HSA MasterCard to pay for covered medical, dental, or vision expenses at participating locations (e.g., your doctor’s office or in-network retail pharmacies). The funds you use will be automatically deducted from your HSA. Remember, the HSA works just like a traditional bank account — you must have enough funds in your account to cover the expenses you're paying.
You are not eligible for the HSA if you are enrolled in Medicare or covered under another plan (e.g., a spouse’s plan) unless that plan is a qualifying High Deductible Health Plan. If you currently participate in a Health Care FSA, you must have a $0 balance in your FSA by January 1, 2016 in order to open and contribute to an HSA in 2016.
The FSA is a spending account, while the HSA is a savings account. With an FSA, you are expected to spend the money you have set aside within the year it is set aside, while with an HSA you may save the money until you need it — even if you do not need the funds until well into the future. Another key difference is the FSA features a "use it or lose it" rule; this rule does not apply to the HSA.
You may enroll in either an HSA or the Health Care FSA in one plan year. You may not enroll in the Health Care FSA if you choose to enroll in the HDHP with HSA option.
If you earn less than $75,000 per year, NYU will contribute to your HSA:
HSA contribution limits for 2016 include your contributions and NYU’s contributions, if applicable: