HSAs offer a triple tax advantage:

• Contributions are 100 percent tax-deductible for the account holder.
• Funds grow on a tax-deferred basis, and funds are not taxed if used for an eligible expense.
• Funds can be used tax-free for eligible health care expenses.

As you make contributions to your HSA, you can save the funds or spend the funds on current health care expenses. Unused funds and interest carry forward, without limit, from year to year. As the account holder, you own the account and can keep the account even if you change jobs or stop working.

To qualify for an HSA, you must meet the following requirements:

• You must be covered by the Savings Plan, which is a qualified high-deductible health plan (HDHP).
• You must have no other health coverage, including a spouse’s plan that provides benefits covered by your HDHP. You can, however, have accidental, disability, dental, vision or long-term care coverage or coverage that provides benefits for a specific disease or illness, a fixed amount for hospital stays or liability coverage, such as workers’ compensation.
• You are not enrolled in Medicare.
• You do not receive health benefits under TRICARE.
• You have not received Veterans Administration (VA) benefits within the past three months.
• You cannot be claimed as a dependent on someone else’s tax return.

While you cannot enroll in a traditional MSA, you may enroll in a Limited-use MSA, which allows you to pay for dental and vision expenses only.

A Limited-use MSA is a Health Savings Account (HSA)-compatible MSA. The Limited-use MSA allows you to set aside money pretax to pay for dental and vision care expenses. If you are enrolled in the Savings Plan, you are eligible to participate in a Limited-use MSA, which will help maximize your tax savings. The HSA can be used to pay all types of medical expenses incurred now or in the future; however, the Limited-use MSA can be used only to pay for current year dental and vision expenses.
Here's a tip. Plan carefully to preserve the value of both accounts by using your HSA funds to save and invest for future health care expenses, or large, unexpected expenses. Use your Limited-use MSA to pay for routine dental and vision care expenses you incur each year.

First, you need to enroll in the Savings Plan and an HSA during open enrollment for the 2025 plan year. Your MSA includes a carryover provision, which means you can carry over up to $640 of your MSA balance into the 2025 plan year; however, you cannot contribute to your HSA in the new plan year if you have a balance in your MSA. Therefore, any carryover funds in your MSA will automatically convert to a Limited-use MSA if you enroll in an HSA.

When you enroll in the Savings Plan and elect to make contributions to an HSA, PEBA will notify HSA Central to setup a bank account for you. You will receive a welcome email with directions to activate your account. You will receive your HSA Central debit card within 7 to 10 business days. Be sure to log in to your account online to accept the account's terms and conditions and call to activate your debit card to fully access your new HSA.

To designate a beneficiary, log in to the HSA Central Consumer Portal, select Accounts, then Profile Summary and Add Beneficiary. It's important to review your beneficiary designations periodically to ensure they are up to date.

You may contribute to your HSA via pretax payroll contributions through your employer or you may make post-tax deposits to your HSA by contributing funds from your account at another bank. You can add your bank account to your health savings account to easily add funds to your HSA any time. You'll receive the post-tax benefits when you file your annual taxes.

Yes. You can change your contribution to your HSA at any time, but no more than once a month. To change your pretax payroll deduction amount, contact your employer.

The IRS establishes annual contribution limits for individuals and families based on their level of health insurance coverage. The IRS also includes special rules that allow individuals ages 55 to 65 to make catch-up contributions. Anyone can make contributions to an HSA of an eligible individual. Excess contributions, if not withdrawn in a timely manner, may be assessed an excise tax of 6 percent.

Individuals between ages 55 and 65 can contribute an additional $1,000 per calendar year. A married couple may make two HSA catch-up contributions, so long as both spouses are at least age 55 and a separate HSA is established in the name of each spouse.

Anyone can contribute funds to your HSA. For example, family members or any other person may make contributions on behalf of an eligible individual.

You can make a one-time contribution from an IRA to your HSA, subject to the maximum annual contribution limits and provided it is a direct IRA to HSA transfer.

Yes. You can transfer amounts from your other HSA(s) by completing the HSA Central Transfer Request Form. While there are no transfer fees from HSA Central, you should check with other bank custodians for details about their fees. There is no limit to the amount of HSA funds you can transfer to HSA Central from other HSA(s) because HSA-to-HSA transfers do not count toward the IRS annual contribution limit.

You must report the excess amount as gross income on your income tax return, and an excise tax of 6 percent will apply. You can withdraw excess contributions by contacting HSA Central, and the 6 percent excise tax will no longer apply.

No. An HSA is individually owned; however, you can add your spouse's information to your account, which allows them to obtain an HSA Central debit card.

Yes. Annual contributions should be made by your tax filing deadline. For most individuals, this date is April 15 of the following year.

Yes. You can invest your funds once your account balance reaches $1,000. You have a variety of investments from which to choose, or you can self-direct funds with a registered representative by contacting the bank custodian, Central Bank. Investments are not guaranteed and may lose value, including the loss of principal. Investment products and services are not a deposit, not FDIC insured, not insured by any federal government agency, not guaranteed and may go down in value.

You can no longer make contributions to your HSA; however, your HSA funds are available to you to use to pay for qualified health care expenses.

Yes. As long as the qualified health care expense occurred after you opened the HSA, you can pay for the expense or reimburse yourself with HSA funds. Keep copies of your itemized receipts and insurance plan explanation of benefits (EOBs) to verify your funds were used for qualified health care expenses, not paid for by another source or taken as an itemized deduction for a prior tax year.

Qualified expenses are defined by the IRS as amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease or for the purpose of affecting a structure or function of the body, as well as for transportation primarily for and essential to such care. Qualified expenses generally do not include insurance premiums, but do include premiums for long-term care insurance, COBRA coverage, health care coverage while receiving unemployment compensation, or Medicare and other health care coverage if you were age 65 or older (other than premiums for a Medigap policy, such as the Medicare Supplemental Plan).

See IRS Publication 502 and IRS Publication 969 for more information.

Yes. You can use HSA funds to pay for qualified health care expenses for yourself, your spouse or dependent even if they are covered under another health plan. Generally, people qualify as your dependent(s) if you claim them as an exemption on your federal income tax return. Be sure to consult a qualified tax advisor for further information about your personal situation.

HSA funds can be spent on current year expenses or saved for future expenses to pay for qualified medical, dental, vision and prescription drug expenses as defined in IRS Publication 502. Funds used for non-health care expenses are subject to income tax and, if you are younger than age 65, are subject to a 20 percent IRS penalty.

For a list of qualifying expenses, visit www.irs.gov.

When you open an HSA, you will receive some exclusive features designed to make paying and tracking your qualified expenses seamless and user-friendly. You will receive a MasterCard® debit card that you can use for payments and the opportunity to use free online Bill Pay. For ease of use, you can add your HSA Central debit card to your digital wallets, including Apple Pay, Samsung Pay and Google Pay. You will also have access to your account statement online.

Contact HSA Central at 833.571.0503 for assistance in returning the funds to ensure it is not reported as a current year contribution. If a provider makes a check payable to you for a refund, you can mail the check to HSA Central with a Contribution Form, which is available on the HSA Central consumer portal. Select "Mistaken Distribution" on the form to ensure the refund is coded properly.

HSA funds used for something other than qualified health care expenses are considered part of your gross income and are subject to applicable income tax and a 20 percent tax penalty. Funds used after an account holder’s death or disability or after age 65 are not subject to the 20 percent penalty.

Yes. Individual account holders must file IRS Form 8889 with their annual tax return to report contributions and distributions from the account. HSA Central, will provide two tax forms:

• Form 5498-SA to report the contributions and rollovers made during the previous calendar year; and
• Form 1099-SA to report the total amount of distributions from the HSA.

Yes. If you designate your spouse as the beneficiary, the account will be treated as your spouse’s HSA after death. If your spouse is not the beneficiary, the account stops being treated as an HSA, and the fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. If your estate is the beneficiary, the value is included on your final income tax return. You can also designate a trust as the primary or contingent beneficiary.