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HEALTH SAVINGS ACCOUNT (HSA)

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.)

Am 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)).
  • May not have a spouse who participates in a general purpose health care flexible spending account (FSA).
  • May not have a spouse who participates in a health reimbursement account (HRA) that covers pre-deductible medical expenses.

Note: To be eligible to contribute to an HSA, you must not be enrolled in a Health Care 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 on July 1, 2022, you're not eligible to contribute to the HSA until the first of the month following the grace period, or Oct. 1, 2022.

Here’s how the HSA works:

  • Throughout the year (over 24 pay periods), 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 2022, you and Children’s Mercy together can contribute up to $3,650 if you cover yourself only and $7,300 if you cover dependents. If you’re age 55 or older, you can contribute an extra $1,000 in catch-up contributions. Your contributions will be withheld from the first two pay checks of each month (24 pay periods). (Refer to chart below for information on how to determine your maximum employee contribution.)
  • 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 copay for a medical service, you don't pay anything at the time of your visit. You'll 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 HealthEquity 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 wellbeing activities, you earn points, which convert to dollars in your HSA. If you are newly eligible for benefits and enroll between June 1 through Dec. 31, you automatically will receive $400. If you are newly eligible for benefits and enroll between Jan. 1 through May 31, you automatically will receive $200. Your wellbeing dollars will be funded to your HSA throughout the year on the first two paychecks of each month (a maximum of 24). 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 2022–2023 plan year to have an HSA.
  • Refer to the chart below to estimate the maximum contribution you can make to your HSA. Keep in mind that the annual limit includes your contributions as well as Children's Mercy contributions and all wellbeing dollars you earn.
Coverage Level Annual Contribution Limit Employer Contribution* Potential Wellbeing Dollars (if earned) Maximum Employee Contribution (if all wellbeing dollars earned)
Individual $3,650 $500 $400 $2,750
Employee + Child(ren) $7,300 $750 $400 $6,150
Employee + Spouse $7,300 $750 $800 $5,750
Family $7,300 $1,000 $800 $5,500
Age 55+ $1,000

*The Children’s Mercy employer contribution will be funded over 24 pay periods. Employees and eligible spouses can receive up to $400 each in additional HSA contributions for completing wellbeing activities.

Get more information about the HSA

HealthEquity, the HSA administrator, has tools to help you learn more about the HSA.

  • Get started by accessing the HSA learn site. It includes resources to learn more about the HSA, plus calculators, tools, investment information, and more.
  • Use HealthEquity’s plan comparison tool to compare your medical plan options. You’ll simply estimate your annual medical expenses, then view the plans side by side. The tool also shows the benefits of an HSA, which is available with the Green Plan only.
  • Check out these recorded webinars for more specifics: