Health Savings Account
COMING JANUARY 1, 2025
What is a Health Savings Account (HSA)?
A Health Savings Account is regulated by the IRS. This allows you to set aside money from your pretax income for medical, dental, and vision expense. In order to contribute to an HSA you must be enrolled in an HSA eligible medical plan. See medical plans for more details.
What can I use the funds for?
Funds from your HSA can be used to pay for eligible expenses (copayments, coinsurance, prescriptions, glasses, contacts, dental expenses, eligible medical supplies, etc.). You can also check out the hsastore.com for items that are eligible for HSA purchase.
What are the differences between an HSA and FSA?
While HSAs are similar to FSAs, there are some important differences:
- Your money is yours to keep. The use-it-or-lose-it feature of an FSA does not apply to an HSA. Your balance rolls over from year to year, even if you change your job or health plan. This allows you to build up a substantial balance to cover future healthcare costs.
- Employer contributions. BYU will contribute to your HSA to help you pay for healthcare expenses. These contributions count towards the annual HSA contribution set by the IRS.
- Funds are available as you contribute. You or your employer must first deposit money into the HSA before you can withdraw the money. Unlike an FSA, your total election is not available immediately at the beginning of the year.
- Keep or transfer your HSA. If you change your job or health plan, you can keep your HSA open or transfer it to another provider. You can continue to use it to pay for qualified medical expenses, even if you’re no longer enrolled in an HSA-eligible plan. You can’t make new contributions to the account if you are not enrolled in an HSA-eligible plan, but you can withdraw money tax-free for qualified expenses.
- Triple tax advantage. Pretax money contributed to your HSA can be invested (once it reaches a certain balance) and earn tax-free interest. Withdrawals are not taxed when used for qualified expenses. HSA funds, when used as described, are not subject to federal income, Social Security, or Medicare taxes.
- Name a beneficiary. If you pass away, your HSA is inheritable by your designated beneficiary tax-free for eligible medical expenses.
- Make catch-up contributions. Beginning the year you turn 55, you may contribute up to an additional $1,000 over the contribution limit each year.
Limited Purpose Flexible Spending Account
If you are contributing to and HSA account you are eligible to participate in a Limited Purpose Flexile Spending Account. For more information, please visit Flexible Spending Account page.
For more information on HSA, please see DMBA.com or contact Benefit Services at 801-422-4716.