A Health Savings Account (HSA) is an individually-owned, tax-advantaged savings account. HSA funds may be used to pay for out-of-pocket qualifying medical, dental, prescription, and vision expenses. For information on whose expenses may be covered using this account, see the.
- HSAs offer a triple tax advantage by making the following tax-free:
- Investment earnings
- You decide how much to contribute and may change your contribution at any time.
- HSA funds are yours. The funds in your account carry over from year to year and you take the account with you when you end employment with the UW System.
- The UW System contributes to your HSA* on two paychecks each month.
*Includes crafts workers effective January 1, 2022.
There are strict IRS rules regarding HSAs. If you have legal, tax, or financial questions about HSAs, consult your tax advisor.
Optum is the plan administrator for the Spending & Savings Account.
Review this page for eligibility, annual contribution maximums, eligible expenses, and account owner responsibilities.
You are eligible to enroll in an HSA if you enroll in a qualified HDHP. A qualified HDHP must meet minimum deductible amounts and contains maximum out-of-pocket amounts; both are criteria set by the IRS and adjusted periodically.
If you enroll in the HDHP or the Access HDHP through the UW System, you are eligible for and required to enroll in the HSA.
You are not eligible for the HSA (or the HDHP or Access HDHP) if any of the following apply:
- You are covered by another health plan (for example, by a spouse’s plan) unless that plan is a qualified HDHP
- You or your spouse are enrolled in a Health Care Flexible Spending Account (FSA)
- You can be claimed as a dependent on someone else’s tax return (other than your spouse)
- You are enrolled in Medicare*
- You have coverage under TRICARE or have accessed VA benefits within the past 90 days (which disqualifies you from HSA contributions; some exceptions apply)
*Reminder: If you are already enrolled in Medicare, you are not eligible for the HDHP/HSA per IRS regulations. Medicare eligibility usually begins at age 65, and you can be retroactively enrolled in Medicare Part A, unless you postpone your Medicare enrollment. Medicare Part A is mandatory for those who receive Social Security income. Check with Social Security to determine your eligibility or to postpone Medicare enrollment.
To participate in the HSA for the upcoming plan year, you must re-enroll during the Annual Benefit Enrollment period (which occurs each Fall).
Each year the IRS establishes contribution maximums for HSAs. The annual contribution maximums include contributions from all sources (examples: employee and employer contributions). The contribution maximums depend on the level of coverage you enroll in for State Group Health Insurance (individual or family) and your age. The contribution maximums are:
|HDHP/HSA Coverage Level||2022 Contribution Maximums||2023 Contribution Maximums|
|Less than Age 55||Age 55+||Less than Age 55||Age 55+|
How much will the UW System contribute?
UW System will contribute the below amounts based on your health insurance coverage level (individual or family). The employer contributions begin when you are eligible for the employer contribution towards your health insurance premium. If you are required to pay half of the total health insurance premium, you are eligible for up to half of the annual contribution listed below (pro-rated if you are not enrolled for the entire calendar year).
- Individual coverage: up to $750
- Family coverage: up to $1,500
Contributions are made on a per paycheck basis (two paychecks per month).
The contribution maximums and UW System contribution amounts above are for an employee enrolled in the HDHP or Access HDHP (and HSA) for the entire calendar year. If your enrollment is not effective January 1, the amounts above will be prorated. See the HSA Contributions per Paycheck document in the Forms & Resources section below for more information.
You are responsible for making sure your HSA contributions (from all sources) do not exceed the annual IRS limits.
If you enroll in the HDHP or Access HDHP, you are responsible for managing your HSA. As an HSA owner, you:
- Decide the amount to contribute to the HSA for each calendar year
- Determine how funds in your HSA will be spent or invested
- Declare whether the distributions from your HSA are taxable or non-taxable
- Arrange for the withdrawal of any excess contributions
You cannot delegate these responsibilities to the UW System or to the third-party administrator. As an HSA owner, you are responsible for reporting all contributions and distributions to the IRS on your Form 1040. If you make errors and do not correct them timely, you may pay additional tax or penalties to the IRS. Direct questions to your tax advisor.
For eligible expenses, participant responsibilities and more, review the resources in the Forms & Resources section below or contact your tax advisor.
No. You are not required to contribute to an HSA; however, you must enroll in an HSA if you enroll in an HDHP through the UW System. You may change your contribution at any time. You will receive the UW System contributions even if you are not contributing.
If you enroll in the HSA using the MyUW portal, you will be prompted to enter your annual HSA contribution amount during your enrollment session. If you do not want to contribute to your HSA, enter $0.
If you are not able to enroll using the MyUW portal, you can enroll using the HSA Enrollment Form (available in the Forms & Resources section below). On the form, indicate the annual HSA amount you want to contribute. If you do not want to contribute to your HSA, put $0 on the form.
Remember to factor in the UW System contribution so you do not exceed the annual IRS HSA contribution limit.
HSA contributions (employee and employer) are deducted from two paychecks each month (A and B payrolls). HSA contributions are not deducted from C payrolls.
You may change your HSA contribution at any time.
Review Optum’s List of Eligible Expenses for more information.
In general, expenses are considered eligible for distribution from an HSA if the healthcare expense includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. Expenses must be primarily intended to alleviate or prevent a physical or mental defect, or illness. Typically, expenses solely for cosmetic care are not deemed as qualified medical care, nor are expenses that are merely beneficial to one’s general health.
You can pay for eligible expenses with your HSA payment card. Or you may pay out-of-pocket and request reimbursement. You may only use your payment card or request a distribution for amounts up to the current balance of your account. If funds in the account are insufficient, only the available balance in that account will be issued. An additional distribution request may be submitted once additional funds are available.
With an HSA, it is your responsibility to make sure your purchases are for eligible health, dental, and vision expenses. Save your receipts and retain them with your individual tax return documentation in case you need to prove expense eligibility.
If you use HSA funds to pay for ineligible expenses, the amount will be taxable, and, if you are under 65 years of age, you will pay an additional 20 percent tax penalty.
When your HSA balance exceeds a minimum of $1,000, excess funds may be transferred to an investment account to be invested in top-rated mutual funds where earnings grow tax-free.
For more information, review the HSA Investment Options.
Designate a beneficiary to ensure benefits are paid according to your wishes. If you have a life event, such as a marriage, divorce, birth of a child, review your beneficiary designations and update as necessary. Beneficiary designations can be changed at any time. For more information, review the Beneficiary Information web page.
Forms & Resources
- IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
- Automatic Premium Conversion Waiver (ET-2340)
- Recorded Webinar: Making the Most of Your HSA (14 minutes)
- Recorded Webinar: Tax Time and Your HSA (11 minutes)
- Optum | Phone: (833) 881-8158
- Terms and Conditions
Every effort has been made to ensure this information is current and correct. Information on this page does not guarantee enrollment, benefits and/or the ability to make changes to your benefits.