The HSA Component
When you enroll in the HDHP, a Health Savings Account (HSA) will be automatically opened for you. The HSA is 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 2022, you may contribute up to $3,650 for individual coverage, or $4,650 if age 55 or older; and $7,300 for family coverage, or $8,300 if age 55 or older, into the HSA.
- You can contribute to an HSA through pre-tax payroll deductions.
- If your annual salary is less than $50,000, NYU will contribute $500 to your HSA. If your annual salary is between $50,000 and $74,999, NYU will contribute $250 to your HSA.
- Once funds are available in your HSA, you can use the money to pay for eligible out-of-pocket expenses such as deductibles, coinsurance, prescription drug costs, dental care, and vision care.
- Your money can earn interest and you can invest your funds once your account balance reaches $2,000.
- Unused funds roll over from year to year.
- Your HSA stays with you, even if you retire or leave NYU.
- You receive an HSA MasterCard to pay for expenses.
- You must be covered under the High Deductible Health Plan to contribute to an a Health Savings Account (HSA) and cannot be covered under another plan (e.g., a spouse's plan), unless that plan is a qualifying High Deductible Health Plan.
- You may not contribute to an HSA if you are enrolled in Medicare.
- You should stop contributing to your HSA at least six months before you apply for Medicare to avoid a tax penalty.
- You may not have both a Health Savings Account (HSA) and a Health Care Flexible Spending Account (FSA). Also, your spouse cannot have a Health Care FSA.
- If you elect the HDHP with HSA for the first time during Annual Enrollment and are currently enrolled in a Health Care Flexible Spending Account (FSA), your FSA balance must be at $0 as of December 31st in order to open an HSA in the following calendar year.
- For 2022, the maximum contribution to an HSA is $3,650 for individual coverage and $7,300 for family coverage.
- If you are age 55 or older, you can contribute an additional $1,000 per year.
- You may change your HSA pre-tax contribution amounts any time during the year.
- If you enroll in the HSA after January 1, you may contribute up to the IRS-allowed maximum, however, you must remain enrolled in an HDHP with HSA until the end of the 12th month from your initial enrollment or be subject to tax implications.
- Expenses for domestic partners and/or children not claimed as dependents on your tax return are ineligible for reimbursement from an HSA.
- Non-qualified health care expenses reimbursed through your HSA are subject to income tax. A tax penalty will apply if the non-qualified distribution is taken prior to age 65.
You decide how to use your HSA:
Pay for eligible health care expenses as you incur them
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.
Save for future medical expenses
You can use the HSA to build additional income for health care expenses in future years — or retirement.
Pay expenses even after you leave NYU
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.
Be aware of penalties for non-qualified health expenses
Non-qualified health expenses reimbursed through your HSA are subject to a 20% penalty in addition to income tax.
How do I pay my health expenses with the 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.
How — and when — do I qualify for the HSA?
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 December 31 of the current year in order to open and contribute to an HSA on January 1 of the new year.
What are differences between an FSA and HSA?
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.
Am I able to maintain both an FSA and 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.
Does NYU contribute to my HSA?
If you earn less than $75,000 per year, NYU will contribute to your HSA:
- Less than $50,000 = $500 contribution from NYU
- $50,000 - $74,999 = $250 contribution from NYU
- $75,000 and above = $0 contribution from NYU
HSA contribution limits for 2022 include your contributions and NYU’s contributions, if applicable:
- Under age 55: $3,650 individual coverage; $7,300 family coverage
- Age 55 or older: $4,650 individual coverage; $8,300 family coverage
View a list of mutual funds (PDF) in which Optum Bank HSA account holders have the option to invest. There may be fees associated with your HSA; view the Optum Bank HSA fee schedule (PDF). Read more HSA FAQs (Google Doc: 27 KB). Contact Optum Bank at 800-791-9361.