Health Savings Account (HSA)

HSAs are similar to regular savings account, except that you are saving pre-tax dollars in this account to pay for qualified medical expenses. When you are enrolled in a high deductible health plan, it is important to save for out of pocket expenses. When you build up your HSA, you will have funds on hand to cover your deductible, coinsurance, and other out of pocket medical, dental, and vision expenses. 

Tax Advantages

• Contributions: You contribute pre-tax dollars from your paycheck, so your contributions reduce your taxable income.
• Earnings: The money in your HSA isn’t taxed, even if it earns interest or investment returns.
• Withdrawals: As long as you use HSA funds for qualified medical expenses, withdrawals are tax-free.

Other Key Advantages

• Use your Fidelity NetBenefits debit card to easily pay for qualified expenses with your HSA funds.
• Rolls over year to year--once the money is in your account, it's yours to keep.
• You won't lose the funds in your account even if you change jobs.

Learn More 

Your Fidelity HSA is a brokerage account and the funds can be invested in any security available on the Fidelity platform (individual stocks and bonds, Exchange-Traded Funds (ETFs), mutual funds, etc.).To learn more about your HSA investment options with Fidelity, visit these websites (both offer you filter criteria for which funds to view):

• Fidelity Mutual Fund Screener
• Fidelity ETF Screener

When you first open an HSA, and/or a limited FSA, with Basic Health, you will receive your prepaid benefits card, the Fidelity NetBenefits Access Card, in the mail to your home address. If you have both an HSA and LPFSA, this one NetBenefits Access Card will draw from either of your accounts, and it automatically decides which account to draw from based on the purchase. To replace your card or order additional cards, visit the Fidelity HSA Debit Card webpage.

If you have concerns about not receiving your card or questions about how to use your card, please contact Fidelity for more information by calling 800.544.3716.

Tips from Fidelity:

• Make the most of your health plan and Fidelity HSA
• Turning 65? Here's what you need to know about your HSA

Videos:

• Getting The Most From Your Health Savings Account
  • Getting The Most From Your HSA Transcript
• HSA Eligible Expenses and Ways to Pay Them
  • HSA Eligible Expenses Transcript
• Tips to Save Money on Healthcare Costs
  • Save on Healthcare Transcript

It is very important that if you signed up for Basic Health for the first time, and if you currently have a Full FSA, that you deplete your Full FSA balance to $0.00. If you do not have a zero balance in your FSA by January 1:

• Your HSA cannot be opened and you cannot make employee contributions until April 1
• Deposited funds become available for use on the third bank day after payday
• You may not use money in your account to cover expenses incurred prior to April 1

• Your HSA will be effective the first of the month following the date your benefits enrollment was finalized. However, more action may be needed to open the account.

• Look for emails from Fidelity, the HSA administrator. They may request more information to open your account. Respond to any requests from Fidelity in order to open your account.

• If you list a PO Box as your home address in Workday, your HSA request will be rejected by Fidelity. You must update your PO Box to a physical address before your HSA can be opened. 

• If your account is not open and ready for funding within 90 days, you will forfeit the employer contribution for that year.

• Your Fidelity NetBenefits Card will be mailed by Fidelity. If you do not receive it within a few weeks after the effective date, please contact them.

• Effective the first of the month following the date benefit elections are finalized; account must be opened and ready for funding with Fidelity before any contributions can be made.
• Contributions can be used to pay eligible expenses incurred on or after the HSA account is effective

All active, benefits-eligible employees enrolled in Basic Health are able to have an HSA. You must be eligible for an HSA in order to enroll in Basic Health. 

You are eligible for an HSA if:

• You are not a wage employee
• You do not hold a J-1 visa
• You are not enrolled in Medicare or Medicaid, or are listed as a dependent on someone else’s tax return
• You, or your spouse, do not have a balance in a full healthcare FSA, are part of a FSA grace period, or your plan year is not over
• You have not received healthcare benefits from the Veterans Administration (TRICARE) within the last 3 months
• You do not have a spouse or parent enrolled in a healthcare plan (including a Health Reimbursement Account) that provides you benefits before meeting the annual IRS minimum deductible
• You have not already contributed the annual federal limit to another HSA, Medical Savings Account (MSA), or HRA in the same calendar year.

IRS regulations state that contributions cannot be made to HSA accounts of those who are enrolled in Medicare, regardless of the fact that Medicare Part A is premium-free or whether you use your Medicare Part A coverage. If you are enrolled in Medicare Part A, you cannot be enrolled in the UVA HSA Program. Since you must be eligible for an HSA in order to enroll in Basic Health, you cannot be enrolled in Basic Health if you’re enrolled in Medicare Part A. The same is true if you’re enrolled in Medicare Part B.

Enrolling in Medicare during the plan year does not allow you to switch health options from Basic Health to Value or Choice Health. Therefore, please consider your Medicare options carefully before electing a UVA Health Plan option, and consult with your tax advisor about tax consequences.

Premium-free Part A Medicare coverage will go back (retroactively) 6 months from when you sign up for Part A or apply for benefits from Social Security, but no earlier than the first month you’re eligible for Medicare. Review the Health Savings Accounts section on page 20 of the Medicare handbook for more information and to make sure you stop your HSA contributions in time to avoid a tax penalty.

If you are enrolled in a Health Savings Account, you are not eligible for a Full Healthcare Flexible Spending Account, but you can enroll in a Limited and/or Dependent Daycare Flexible Spending Account to maximize your savings. Learn more about a Limited Flexible Spending Account.

UVA contributes funds to HSA accounts for permanent full- and part-time benefits-eligible academic and medical center employees who are:

• enrolled in the UVA Health Plan's Basic Health option* and
• are active employees receiving a paycheck on the date UVA makes this contribution, and
• have provided the information needed to Fidelity for the account to be opened and ready for funding within 90 days of enrollment

*Wage employees enrolled in Wage Basic Health are not enrolled in an HSA and do not receive employer contributions.

• Employees who are enrolled in the Basic plan as of January 1 each year may receive the following employer contribution:
  • Employee-only coverage: $1,000
  • Family coverage: $1,500
• UVA employer contributions will not change for any employee who adds or removes a dependent in the same calendar year

When Can I Expect an Employer Contribution?

For employees enrolled as of January 1, employer contributions are sent to your Fidelity account following your first benefits deduction payroll date.

New hires and employees who are newly eligible for benefits receive a prorated contribution which is calculated based on the first of the month following the date benefit elections are finalized. Please allow 2-3 business days after submitting elections for your benefits enrollment to be finalized. 

Prorated employer contributions are sent with the first benefited payroll in the month following the date your benefit elections are finalized.  

Example: A new hire submits benefits elections in Workday on July 12. Enrollment is finalized on July 15. Employer contributions will be calculated based on August through December (prorated for five months). Employer and employee contributions will be sent to Fidelity after the first benefited pay period in August. If the employee's HSA is not yet opened and ready for funding, the funds will be placed in a holding account for up to 90 days.

Eligibility to Receive Employer Contribution

• New hires and employees newly eligible for an HSA should respond to emails from Fidelity. Because the HSA is a bank account, Fidelity may require additional information to open the account. Contributions cannot be made until the account is open and ready for funding. 
• If the HSA is not opened within 90 days of Fidelity receiving the UVA employer contribution, the employee forfeits the UVA contribution for that year.

• You and your employer can contribute an annual maximum of:
  • $4,150 for employee-only coverage, or
  • $8,300 for employee + dependents. 
  • Those age 55 and older may make an additional catch-up contribution of up to $1,000 per year.

• ​​​​​You may choose to contribute to your HSA but you are not required to do so.
• Your contributions through payroll are deducted before federal and state taxes.
• The IRS sets a contribution limit each year. This limit includes employer and employee contributions and is per household.
• If electing to make an employee contribution, the minimum per year is $120.

• Subtract the employer contribution from the IRS limit to determine the maximum amount you can contribute.
  • For example, if you are under 55 and want to contribute the maximum of $4,150 to your HSA and are eligible to receive $1,000 in employer contributions, you would elect $3,150 as the employee contribution, to meet the maximum IRS limit for the year of $4,150. 
• When setting up contributions in Workday, enter the annual amount you want to contribute. Your biweekly contributions will be distributed over the remaining pay periods of the year (except for limited deduction paychecks).  
  • There is a known Workday issue in which the biweekly amounts do not appear correctly in all fields, but the annual amount will determine your per paycheck amount to ensure you reach your target annual contribution.
• If your HSA employee deductions aren’t taken from your paychecks because you don’t have enough earnings, the missing deductions will be taken from future paychecks when you again have enough earnings to withhold HSA deductions. Workday will only take one additional missing HSA deduction from each future paycheck in addition to any current deduction until all missing deductions are paid.

• You can increase or decrease your contributions at any time during the year.
• To change your contributions in Workday, go to Menu in the top left and choose Benefits & Pay Hub, Change Benefits. 
• If you are decreasing your contribution, the annual contribution amount cannot be below what you will have already contributed for the year once the change goes into effect.
• Your change will become effective the first of the next month. You will see any change reflected in the paycheck that includes the first of the month in the pay period. 
• Your annual contribution should not exceed the IRS limit. Remember that the employer contribution counts towards this limit. Workday will adjust contributions made through payroll to not exceed the limit, but cannot account for any contributions made outside of payroll. 

Both HSAs and Healthcare FSAs can help you lower your taxable income and use funds tax-free for qualified health care expenses, but they have different rules and benefits.

• Only employees in the Basic health option (a high deductible health plan) are eligible to have an HSA.
• If you are in the Value or Choice option, you can enroll in an FSA, but not an HSA. 
• HSA funds roll over year to year, while FSA funds expire after the grace period; unused FSA funds are forfeited.
• HSA funds can be invested after you have over $1,000 in your account. FSA funds cannot be invested. 
• HSA funds are only available after the money has been contributed into the account. Healthcare FSA funds for that year are available up front. 

Please note:

• If you are enrolled in a Health Savings Account, you are not eligible for a Full Healthcare FSA, but you can enroll in a Limited FSA for dental/vision expenses only. Be aware that the limited FSA is "use or lose" so those funds will not roll over. 
• You cannot have an HSA and an FSA in the same year, unless it is a limited FSA.

Refer to the FSA webpage for more information about FSAs.

If you are enrolled in the Basic Health plan with HSA, you should contribute as much as you can afford, up to the annual maximum, since the HSA offers several tax advantages that make it an excellent long-term savings vehicle.

At the very minimum, you should contribute enough to cover the average out-of-pocket costs that you will likely incur over the course of the year. This strategy makes it more likely that you’ll have the funds on hand to cover the medical care you will need. And, as bonus, if you end up with extra funds at the end of the year, you get to keep that money to cover future medical expenses – including in retirement. 

HSA funds cannot be refunded to you from your HSA account using the UVA payroll process if you contribute more than the IRS allows or if you change your mind about the amount you've already contributed. Be sure to calculate accurately when making your election. You can change the amount of your employee HSA contribution amount taken from future paychecks by changing your benefits in Workday.

• Yes, if you receive an employer contribution, that amount counts towards the IRS limit for that year.
• The IRS limit is also per household, so if your spouse is also contributing to an HSA, you and your spouse's contribution, together with any employer contribution, cannot exceed the IRS limit. The employee is responsible for monitoring this.
• HSA funds cannot be refunded to you from your HSA account using the UVA payroll process if you contribute more than the IRS allows. Please consult a tax advisor if you have questions about tax implications. 

Anyone with a PO Box as their home address in Workday will have their request to open a health savings account rejected by Fidelity. It is a Patriot Act requirement to have a physical address on file before the HSA can be opened.

Please verify your contact information contains your physical address within workday during Open Enrollment.

The following address can be used:
 
2420 Old Ivy Road

Charlottesville, VA 22904-4127