HEALTH SAVINGS ACCOUNT

The Health Savings Account (HSA) is a feature of the Green Plan. (You are not eligible for an HSA if you elect the Blue Plan or Gold Plan.)

iconAm I eligible for an HSA?

Under the law, an eligible individual:

  • Must be covered under a qualified high deductible health plan (HDHP) (see chapter 2) on the first day of any month for which eligibility is claimed (IRC Sec. 223(a), IRS notice 2004-2 Q&A 2 through Q&A 7).
  • May not be covered under any health plan that is not a qualified HDHP, with the exception of certain permitted coverage and certain health-related payment plans discussed in chapter 2.
  • May not be covered by TRICARE.
  • Must not be enrolled in Medicare (the health care component of the Social Security program) (IRC Sec. 223(b)(7), IRS Notice 2004-50 Q&A 2 through Q&A 4).
  • May not be claimed as a dependent on another individual’s tax return (IRC Sec. 223(b)(6)).

Note: To be eligible to contribute to an HSA, you must not be enrolled in a Health Care Flexible Spending Account (FSA) or have a balance in any open Health Care FSA plan year or grace period. If you have any balance in your Health Care FSA account on July 1, 2021, you are not eligible to contribute to the HSA until the first of the month following the grace period, or Oct. 1, 2021.

Here’s how the HSA works:

  • Throughout the year, Children’s Mercy will incrementally fund your HSA – up to $500 to $1,000, depending on your coverage level. You can use the money to pay for eligible medical expenses before you pay anything out of your pocket, or you can choose to pay for the eligible expenses out of your pocket and save your HSA dollars for future eligible medical expenses.
  • You can contribute to your HSA, too, up to the annual IRS maximum. For 2021, you and Children’s Mercy together can contribute up to $3,600 if you cover yourself only and $7,200 if you cover dependents. Keep in mind that the annual maximum includes your contributions as well as CM contributions and all well-being dollars that you earn. Employees 55 and older can contribute an additional $1,000.
  • The money you put into your HSA is not taxed, the money you take out of your HSA to pay for eligible expenses is not taxed and, the interest you earn on your account balance is not taxed. In other words, you benefit from a triple-tax advantage.
  • Unless you owe a co-pay for a medical service, you do not pay anything at the time of your visit. You will receive an Explanation of Benefits from Cigna, which will clearly state what you owe after receiving medical care. If you have money in your HSA, you can use it to pay for your services (using the debit card you’ll receive shortly after you enroll). Or you can pay out of your pocket and save your HSA dollars for future eligible medical expenses.
  • Any unused dollars in your HSA at the end of the plan year will roll over for you to use in the next plan year. Log in to your Health Equity account to check your HSA balance throughout the year.
  • Your HSA is yours to keep. If you leave Children’s Mercy or retire, you take it with you to pay for future eligible expenses.
  • When you and/or your covered spouse complete well-being activities, you earn points, which convert to dollars in your HSA on July 1 if you complete the health screening and health assessment by the communicated deadline. To learn more, call (833) 724-2453 or visit Virgin Pulse online today. To activate your Virgin Pulse account, you will need your date of birth and employee ID number.
  • You must enroll in the Children’s Mercy Green Plan for the 2021–2022 plan year to have an HSA.

Review the chart to understand the CM employer contributions to your HSA.

Employee Only Employee + Child(ren) Employee + Spouse Family
Automatic contribution from CM* $500 $750 $750 $1,000
Additional contributions by completing well-being activities by deadlines* $400 $400 $400 employee + $400 spouse = $800 $400 employee + $400 spouse = $800
Total eligible contributions $900 $1,150 $1,550 $1,800

*Amounts shown assume medical coverage begins July 1. If your coverage starts after that date, amounts will be prorated.