This section outlines the Health Savings Account available to High Deductible Health Plan (HDHP) participants only. This account allows you to put aside pre-tax dollars that can grow over time (not use or lose like an FSA). If the HSA is elected, employer contributions will be made as well. This can be a valuable resource to offset the higher deductible as well as be a savings and investment vehicle. HDHP participants should also view the Flexible Spending Section (FSA) for information on the Limited FSA available to them. This account is managed by McGriff Insurance Services.
HSA Eligibility
Only HDHP participants can elect to an HSA. This can be used for any dependents, regardless of whether the dependents are enrolled in the health plan. This can be used in conjunction with a Limited FSA (see "Flexible Spending Accounts (FSA)" section below).
There are additional IRS restrictions on who can participate in an HSA.
You are eligible for an HSA if:
- You are not enrolled in Medicare, Part A, or Part B.
- You or your spouse do not have a balance in a Full Healthcare FSA. For those employees currently participating in our FSA, please see the section below on transition.
- If you cannot be claimed as a dependent on another person’s tax return.
- If you have not received healthcare benefits from the Veterans Administration (Tricare) within the last three months
- If your household has not already reached the annual contribution limit for an HSA
Receiving employer seed funds is considered participation, even if you do not choose to contribute yourself. Be sure to review the HSA Educational Materials linked below to review all eligibility guidelines. Reach out to the Benefits team if you have any questions about your specific situation. McGriff representatives will also be available during the scheduled benefit sessions.
HSA Highlights
- Can be used for eligible health care, dental, and vision expenses
- Balances roll over each year and accrue interest, allowing you to save pre-tax dollars over time for medical expenses
- You get to keep the balance even if you leave UPG or move to a non-HAS eligible health plan
- Both employees and employers can make pre-tax contributions up to the IRS annual limit. For those 55 and older, an additional catch-up amount is allowed.
- Seed funds from UPG can help offset higher deductible: $750 employee only | $1,500 all other coverage levels. You do not need to contribute to the HSA yourself to receive the employer seed funds.
- Can be used with a dental/vision-only Limited FSA
- You may invest your HSA assets in a variety of investment options for potential growth of your account over time. Any growth made from the investment is tax-free as long as it is used on eligible medical expenses (see "Resources" below).
- You can change your employee contribution at any time in Workday.
- Contributions can be used to pay eligible expenses incurred on or after the HSA account is open. When you first enroll, McGriff Insurance Services may require additional information to open your HSA. Please respond to emails in a timely manner to avoid forfeiture of the UPG employer contribution to your HSA.
HSA 2024 Annual IRS Contribution Limits
These limits include employer contribution and contributions made outside of UPG.
- $4,150 for employee only
- $8,300 for employee + dependents or family
- Up to $1,000 in additional contributions for age 55 and over
- Combined $8,300 if both spouses are eligible and contributing to an HSA, regardless of their employer (current maximum set by IRS)
Transitioning from an FSA to an HSA
- Per IRS regulations, you cannot participate in both a Full FSA and an HSA. If you are currently enrolled in UPG’s FSA and enroll in the HDHP/HSA, then we need to close your current Full FSA. Otherwise, your HSA cannot be opened, and you will not be able to make employee contributions, or accept the UPG seed funds.
- You have until June 30 to use the funds in your account, otherwise you will forfeit any funds over the $610 rollover maximum. While the IRS does not allow participating in a Full FSA and HSA at the same time, you can have an HSA at the same time as a Limited FSA. Therefore, the rollover maximum will be moved to a Limited FSA as of July 1, 2024 and you will be able to use those funds on dental or vision expenses only going forward. You will be able to submit for reimbursement for expenses occurring before June 30, 2024 for up to 90-days to reduce your rollover or forfeited amount. The FSA store is a great way to help spend unused dollars prior to June 30th.
HSA Contributions
- HSAs for new hires and those newly-eligible for an are effective on the first of the month following the submission of the enrollment request in Workday.
- You must elect the HSA to receive the employer seed funds. But You DO NOT need to contribute to the HSA to receive the employer seed funds.
- Because the employer funds are considered active participation in the HSA, please be sure you are eligible before electing.
- Employer seed funds will be based off your coverage tier on the date of enrollment. If you add or remove a dependent during the plan year, the employer seed funds will not adjust until the following plan year
- Employee-only coverage on 7/1/2024: $750
- Employee Plus on 7/1/2024: $1,500
- Changes to your HSA contributions can be made at any-time.
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When you make your election, Workday will calculate your annual goal. As payroll is processed throughout the year, Workday will ensure your UPG contributions and employer seed funds do not exceed the annual contribution limit. Workday cannot factor in any other contributions your household makes into an HSA.
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Because payroll processes are based on the annual goal, per-paycheck contributions may adjust. For example, 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
HSA Over-Contributions
- Each employee utilizing IRS tax shelters such as FSAs and HSAs is responsible for assuring their IRS compliance.
- Be sure your spouse does not open a Full FSA during the same calendar year in which you are enrolled in the UPG HSA Program. If this, or any other coordination issue between you and your spouse or other family members occurs, you will be able to cancel future elections, but not make retroactive changes to your contributions or deductions to remedy any tax problems that might result.
HSAs and Medicare
- IRS regulations state that contributions cannot be made to HSA accounts from those who are enrolled in Medicare. If you are enrolled in any part of Medicare, including Medicare Part A, you cannot be enrolled in the UPG HSA Program. You can enroll in the HDHP, as you are able to use funds from preexisting HSA accounts.
- If you anticipate enrolling in Medicare during the plan year, please reach out to us.
- If your spouse is on Medicare, this does not disqualify you from continuing contributions to the HSA up to the family limit, even if they are also covered by the HDHP. Your funds can be used to also pay for their medical expenses and reimbursement for their Medicare premiums.
Resources
HSA Education Materials<----- Start Here
HSA Planner
HSA Welcome Guide
HSA Brokerage Account FAQ
HSA Investments Guide 2024
HSA Mutual Funds
FSA Store