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HSA FAQs and Resources

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FAQs

The following questions and answers will help you better understand the Health Savings Account (HSA). If your question is not addressed here email your question to .

A. Account basics
  1. What is a Health Savings Account (HSA)?

    The Health Savings Account is a special tax-advantaged bank account that can be used to pay for IRS-qualified health expenses for you and your family members.  The three main tax advantages to an HSA are:

    • No taxes taken on the contributions made to the account.  All contributions are made on a pre-tax basis via payroll deductions.
    • No taxes when the funds in the account are used for IRS-qualified health expenses.
    • No tax on account interest or investment earnings.

    Because this account offers tax-advantages, it is regulated by the IRS.  The IRS stipulates the maximum annual contribution amount that you can contribute to the HSA, the eligibility rules for being allowed to have an HSA account, as well as the list of expenses that the HSA can be used for. See the Health Savings Account Contributions and Using the HSA Funds sections of these Q&As for more details.

  2. How does an HSA plan save me money?

    An HSA plan may save you money through  the tax savings. Additionally the money deposited into your account by the university can be used to pay your deductible and other out-of-pocket health expenses in the current year or in the future.

  3. What are the tax benefits of the Health Savings Account?

    When you enroll in the HSA, you get a triple tax advantage:

    • Your contributions—and all of IU's contributions—go into your HSA before taxes are withheld.
    • The money you withdraw today, tomorrow, or in the future is not subject to taxes as long as you use it to pay for eligible healthcare expenses.
    • The earnings on your HSA, if any, are also tax-free. (You can invest your savings in a variety of mutual funds when your HSA balance reaches $1,000 or more.)
  4. What is the process for setting up an HSA?

    If you choose to enroll in one of the HDHP plans (Anthem PPO HDHP or IU Health HDHP) and the HSA as a new hire or during Open Enrollment, IU will automatically send your application information to Nyhart to open an HSA for you. The application process includes the Customer Identification Process (CIP) of the USA Patriot Act. The CIP provision requires the bank to verify their customers’ identification. The identification information needed includes the customer’s name, date of birth, address and ID number (SSN).

    If there are any inconstancies, Nyhart will contact you directly (by email, phone or by mail) and will request additional documentation in order to complete the CIP. This may delay the opening of your HSA if not responded to promptly. Your campus HR office is available to assist you through this process.

    Once your HSA has been opened, Nyhart will automatically send you two IU Benefit debit/VISA cards and additional information regarding your account.

  5. How do I get a debit/VISA card for my HSA account?

    Once your HSA account is set-up with Nyhart they will automatically issue two cards in your name to your home address. If you would like additional cards for other family members, you can go online to iu.nyhart.com and login to your account. If you want more than the 2 initial cards, fees will apply.

  6. Is it a debit card or a credit card?

    Debit card. This card is attached to a deposit account and not to a credit account but may be used anywhere Visa is accepted.

  7. What amount does the university contribute to my Health Savings Account?

    When you are enrolled in the Anthem PPO HDHP, IU contributes $1,300 for those with employee-only coverage level or $2,600 for all other coverage levels.

    When you are enrolled in the IU Health HDHP, IU contributes $1,600 for those with employee-only coverage level or $3,200 for all other coverage levels.

    The contribution is made as one deposit into the employee’s HSA account and is not prorated. The deposit is usually made with the second paycheck in January or the first paycheck after benefits have been elected in the case of a newly eligible employee.  However, those that enroll in the HSA or change their HDHP coverage level on or after September 1st will not receive IU’s contribution to their account for that year.

  8. What are qualified health expenses?

    Following is a list of some items that are qualified expenses. This list is not all-inclusive, and is subject to change by the IRS.  After you open an HSA, you can use funds to pay for covered expenses that apply toward the HDHP annual deductible and co-insurance costs (e.g. medical services, prescriptions, mental health services, etc). You can also pay for qualified health expenses that your health plan might not cover, such as vision care (eyeglasses and contact lenses), dental and orthodontic services. Qualified health expenses also include long-term care premiums, Medicare premiums, Medicare co-pays, and COBRA premiums. Detailed information about qualified health expenses can be found in Section 213(d) of the Internal Revenue Code and IRS Publication 502 (PDF). A Summary of the Eligible HSA Expenses (PDF) is also available.

    Examples include:

    • Diabetic supplies
    • Eye exams, eyeglasses, contact lenses and solutions
    • Hearing aids
    • Laser eye surgery
    • Orthodontia, dental cleanings and fillings
    • Prescription drugs
    • Physical therapy, speech therapy and chiropractic expenses
    • Specialized equipment and devices for disabled persons
    • Transportation expenses related to medical care
    • Weight reduction programs for physician-diagnosed obesity
    • Premiums: Long-Term Care, Medicare, COBRA
  9. What expenses are not eligible?

    Following is a list of some items that are non-qualified expenses. This list is not all-inclusive, and is subject to change by the IRS. Any HSA funds used for non-qualified expenses will be taxable. These distributions will also be subject to a 20% IRS penalty if you are under the age of 65, unless they are made after death or disability. Consult a tax advisor if you are in doubt about a particular expense. Detailed information about qualified health expenses can be found in Section 213(d) of the Internal Revenue Code and IRS Publication 502 (PDF).

    Non-Qualified Medical Expenses include:

    • Advance payment for services rendered next year
    • Athletic club membership
    • Car insurance premium (medical portion)
    • Boarding school fees and child care
    • Commuting expenses of a disabled person
    • Cosmetic surgery and procedures (unless due to accident, birth defect, or disease)
    • Cosmetics, hygiene products, and similar items
    • Diaper service
    • Domestic help
    • Fitness programs/health club dues
    • Funeral, cremation, or burial expense
    • Illegal operations and treatments
    • Illegally procured drugs
    • Maternity clothes
    • Over-the-counter medication (unless accompanied by a prescription)
    • Premiums for life insurance, income protection, disability, loss of limbs or sight
    • Scientology counseling
    • Social activities
    • Special foods or beverages
    • Teeth-whitening services & products
    • Toothpaste and mouthwash
    • Travel for general health improvement
    • Tuition and travel expenses to send a special needs child to a particular school
    • Weight loss programs
  10. Who will determine whether something is a "qualified health expense"?

    The IRS will make this determination based on disbursements reported on your annual tax return. You do not submit records with your IRS return, but it is your responsibility to maintain records for all of your expenses in the event the IRS requests them. Specifically, the IRS requires that you must be able to show that:

    • The distributions were exclusively to pay or reimburse qualified health expenses,
    • The qualified health expenses had not been previously paid or reimbursed from another source, and
    • The health expenses had not been taken as an itemized deduction in any year.
  11. Does the money in my account earn interest?

    Yes, money kept in an FDIC-insured cash account earns interest. Additionally, if your balance reaches $1,000 you can open an investment account and can transfer those funds into various mutual funds.

  12. Can the unused funds in my account be rolled over each year?

    Yes, all unused funds carry over from year to year. They stay in the account indefinitely until they are used.

  13. What are the survivor benefits associated with my Health Savings Account?

    Your Health Savings Account will pass to your surviving spouse or named beneficiary. If your spouse is the recipient, no taxes will be assessed if the funds are used for qualified health expenses. If someone other than a spouse is the beneficiary, that person will have to pay applicable taxes. If you are unmarried and do not have a named beneficiary, the money is disbursed to your estate and subject to any applicable taxes.

    Beneficiary designations can be done online at iu.nyhart.com. If you want to assign beneficiary rights to your estate, please contact Nyhart directly at 800-284-8412.

  14. What are the possible account fees?

    Indiana University will pay the basic monthly account maintenance fees as long as you are an active employee in the HSA. The basic account maintenance fee covers online account access and reporting plus two IU Benefit debit/VISA cards.

    When you separate from the university or switch to a non-HDHP medical plan, you will be responsible for all account fees (currently $2.50/month for the Nyhart HSA Cash Account). However, additional fees do apply for things like insufficient funds, additional cards, issuance of checks, etc. A complete fee schedule (PDF) is available.

  15. How do I give permission for my spouse to be able to access my account information?

    In order to protect your personal health information (PHI), you will need to complete an Authorization to Disclose PHI form.  This form will allow Nyhart to be able to release the following types of information over the phone or via email to a designated person:  Names, full address, elements of dates directly related to you, (effective date, termination date, date of death, etc.), medical record numbers, claim substantiation/information, check issuance/amount/information, account balance information, debit card activation, health plan beneficiary numbers, account numbers, certificate/license numbers, device identifiers and serial numbers, etc.

    The PHI form can be found on the Nyhart website at iu.nyhart.com in the HSA Forms and Resources area. It will require the signature of a IU Human Resources representative or a notary.

  16. Can I transfer a prior HSA account into my new Nyhart HSA account?

    Yes. Complete a “Trustee-to-Trustee Transfer” form (PDF) and Nyhart will have your old account balance transferred to your new Nyhart account. This type of transfer is free and does not count toward the IRS contribution maximum.

  17. Can I transfer my spouse’s HSA to my Nyhart HSA?

    No.  An HSA is an individual account in your name.  You cannot combine it with an account in someone else’s name.

B. Eligibility
  1. Who is eligible for this plan?

    In order to be an eligible individual and qualify for tax-free contributions to an HSA, you must meet the following requirements:

    • You must be covered under a high deductible health plan (HDHP),
    • You must have no other medical coverage (see next section for details).
    • You must not be enrolled in Medicare.
    • You must not be claimed as a dependent on someone else’s tax return.
    • You must have a valid Social Security Number.
  2. No Other Medical Coverage requirement

    In order to be eligible for tax-free contributions into an HSA, the IRS requires that you have no other medical coverage other than an IRS-qualified high deductible health plan. You are disqualified for tax-free contributions if:

    • You are enrolled in a federal government plan like Medicare A, B, or D, Tricare, or have received VA medical services in the last three months;
    • Your spouse covers you on an IU plan or another employer’s medical plan unless it is also a high deductible plan;
    • Your spouse has a Health Reimbursement Account (HRA) or flexible spending account (FSA) or IU’s TSB Healthcare Reimbursement account that is unrestricted, and the account could be used to cover your HDHP deductible.

    You are still eligible to put tax-free contributions into your HSA if your spouse has other medical coverage. However, you cannot be covered on his/her non-HDHP medical plan or his/her HRA/FSA/TSB plan and still be eligible to make tax-free contributions to your HSA account.

    If you are ineligible to make tax-free contributions, you can waive the HSA and still elect to be enrolled in an HDHP plan.

    If you are ineligible to make tax-free contributions and still elect the HSA, you are responsible for reporting the ineligible HSA contributions on your annual tax return as taxable income.. Consulting a tax advisor about reporting ineligible contributions is advised.

  3. Am I eligible for these plans if I am here on a J-1 Visa?

    No. According to the U.S. Department of State, all J-1 Visa holders must have health insurance; however, the insurance policy cannot have a deductible that exceeds $500.  J-1 Visa holders are eligible for the Anthem PPO $500 Deductible plan.

  4. Can I enroll in an HSA if I have other insurance that pays medical expenses?

    Yes and No. You cannot be covered, as an employee or as a dependent, under any other plans that can cover the expenses you incur to meet your HDHP deductible and still be eligible to make Health Savings Account contributions on a tax-free basis.

    You are disqualified for tax-free contributions if:

    • You are enrolled in a federal government plan like Medicare A, B, or D, Tricare, or have received VA medical services in the last three months;
    • Your spouse covers you on an IU plan or another employer’s medical plan unless it is also a high deductible plan;
    • Your spouse has a Health Reimbursement Account (HRA) or flexible spending account (FSA) or IU’s TSB Healthcare Reimbursement account that is unrestricted, and the account could be used to cover your HDHP deductible.

    However, you may have automobile, dental, vision, disability and long-term care insurance at the same time as an HDHP, and coverage for a specific disease (e.g., a cancer policy) or illness, as long as it pays a specific dollar amount when the policy is triggered.

  5. My spouse has a flexible spending account (FSA, like the IU TSB plan) or HRA through her/his employer. Can I enroll in the HSA?

    You can enroll in the HDHP medical, however, according to the IRS, you cannot contribute tax-free dollars to an HSA if your spouse’s FSA, HRA or their IU TSB Healthcare account can pay for any of your medical expenses before your HDHP deductible is met. Please note that unless your spouse’s FSA agreement specifically states it does not cover you, you are not eligible to make tax-free contributions to an HSA plan.

  6. If both spouses are enrolled in the HSA, but one spouse has other coverage, are both spouses eligible for an HSA? How much can each spouse contribute?

    The following examples describe how much can be contributed under varying circumstances. Assume that neither spouse qualifies for "catch-up contributions." Please note that when a spouse has an HDHP plan with another employer, the university will not be able to assist in limiting contributions to statutory maximums. If a spouse exceeds statutory maximums, he or she is responsible for taking corrective actions and responsible for any tax consequences.

    Example 1: Husband and wife are enrolled in the IU Anthem PPO HDHP & HSA (employee/spouse coverage) with a $2,600 deductible. Husband has no other coverage. Wife has additional self-only coverage through her employer (IU or another employer) which has a $900 deductible. Wife, who has coverage that does not qualify as an HDHP, is not eligible to contribute to an HSA in her name. Husband may contribute $6,750 to his Health Savings Account (HSA) fund.

    Example 2: Husband and wife are enrolled in the IU Anthem PPO HDHP & HSA (employee/spouse coverage) with a $2,600 deductible. Husband has no other coverage. Wife has additional self-only HDHP coverage with another employer with a $2,600 deductible. Both husband and wife are eligible individuals to have and to contribute to their own HSA accounts. However, husband and wife are treated as having “family” coverage. The combined HSA contribution by husband and wife cannot exceed $6,750, to be divided between them by agreement.

    Example 3: Husband and wife are enrolled in the IU Anthem PPO HDHP & HSA (employee/spouse coverage) with a $2,600 deductible. Husband has no other coverage. Wife also has family HDHP coverage with a $3,000 deductible. Both husband and wife are eligible individuals to have and to contribute to their own HSA accounts. The maximum combined HSA contribution by husband and wife is $6,750, to be divided between them by agreement.

    Example 4: Husband and wife are enrolled in the IU Anthem PPO HDHP & HSA (employee/spouse coverage) with a $2,600 deductible. Husband and wife also have family coverage with a $200 deductible through the wife’s employer plan. Husband and wife are treated as having family coverage with the lowest annual deductible ($200). The $200 deductible does not meet the IRS requirement of a minimum annual deductible of $2,600 for ‘family’ coverage. Thus, neither husband nor wife is an eligible individual and neither may contribute tax-free to an HSA.
    Example 5: Husband and wife are enrolled in the IU Anthem PPO HDHP & HSA with a $2,600 deductible. Husband has no other coverage. Wife is also enrolled in Medicare. Wife is not an eligible individual and cannot contribute tax-free to an HSA. Husband may contribute $6,750 to an HSA.

  7. What if I am only eligible part of the year?

    If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if age 55 or greater, so long as you start your HDHP coverage no later than December 1 of that year. In this case; however, you will be subject to a testing period. The testing period requires that you maintain HSA eligibility for a period beginning on December 1 of the year you started and ending on December 31 of the next year.

    If this is not your first year of the HSA and you stop your HSA eligibility mid-year, you are only allowed to contribute 1/12 of the applicable federal limit times the number of months you were eligible.

  8. I am currently enrolled in an HDHP and HSA, but plan to leave the university. Can I continue the HDHP and HSA after I have separated from the university?

    Yes, you may retain enrollment in the plan for up to 18 months through COBRA continuation coverage. The University will no longer make contributions to your Health Savings Account via pre-tax payroll deductions, but as long as you are enrolled in a HDHP, you are still allowed to put contributions into your Health Savings Account up to the IRS allowed maximum. Any contributions put in your account on an after-tax basis are eligible to be deducted from your gross taxable income on your tax return.  

  9. Can I use the money in my HSA to pay for health care for a family member?

    Yes, you may use your HSA funds to pay for the qualified health expenses of you, your spouse* or a dependent without tax penalty even if they are covered under another health plan. 

    *  A spouse means one by marriage, either opposite-sex or same-sex, legally entered into in one of the 50 states, the district of Columbia, or a U.S. Territory or a foreign county.  Spouses qualify for preferential federal tax treatment of health care benefits.

    The healthcare reform law has made it possible for parents to keep children through age 25 on their health plans – even those who are married and living away from home. TSB funds can be used for the healthcare expenses for these children, even if they are not covered on your medical plan. However, HSA funds can only be used tax-free on family members who qualify as IRS-defined tax dependents.

  10. Who qualifies as a dependent?

    A person generally qualifies as your dependent for HSA purposes if you claim them as an exemption on your Federal tax return.  Please see IRS Publication 502 for exceptions.

C. TSB Accounts

Download the PDF comparing the TSB Healthcare Plan Account and the HSA plans.

  1. The University offers the TSB Healthcare Reimbursement Account. Can I have both the TSB Healthcare Account and an HSA?

    Yes.

    When the employee has both the HSA & TSB accounts, the TSB Healthcare account funds can only be used for dental and vision expenses until the HDHP deductible has been met for the year. Proof of meeting the deductible must be provided to Nyhart.

    For those enrolled in both the HSA and the TSB Healthcare plan, they will receive the IU Benefit card for the use of both accounts. The card is a “stacked card”. That means that when the card is used at medical or pharmacy providers, the card will automatically draw from the HSA account funds. When the card is used at dental and vision providers, the card will automatically draw from the TSB funds first, then the HSA funds if the TSB funds have been exhausted. Once the deductible is met for the year, the funds in the TSB can then be used for medical and prescription expenses, HOWEVER, the IU Benefit debit/Visa card will only pull medical and prescription expenses from the HSA account. To use the funds in the TSB for post-deductible medical and prescription expenses, you will need to pay for the expense out-of-pocket then submit a claim for reimbursement to Nyhart.

    Please adjust for this limitation when deciding your pledge for the year.

  2. If both myself and my spouse work for IU, can I have the HSA and my spouse have the TSB Healthcare Account?

    No. If your spouse is enrolled in the TSB Healthcare Reimbursement Account through IU or another employer, you are not eligible to make tax-free contributes to an HSA.

  3. Who will keep track of when I have hit the deductible and am eligible to pay medical expenses out of my TSB Healthcare Account?

    For the Anthem PPO HDHP, Anthem tracks your deductible. For the IU Health HDHP, IU Health tracks your deductible. You will need to monitor the Explanation of Benefits (EOB) statements sent by Anthem or IU Health after medical transactions. This statement will list the cumulative charges applied towards your annual deductible. Once you meet the deductible (for the Anthem PPO HDHP: $1,300 for single coverage and $2,600 when one or more family members are covered; for the IU Health HDHP: $2,500 for single coverage and $5,000 when one or more family members are covered) you will need to send this statement to Nyhart as proof that you have satisfied the deductible. After Nyhart receives this information from you, they will allow payment of medical expenses out of your TSB Healthcare Account. However, the debit/Visa card will only pull medical and prescription expenses from the HSA account. To use the funds in the TSB Healthcare Account for post-deductible medical and prescription expenses, you will need to pay for the expense out-of-pocket then submit a claim for reimbursement to Nyhart. All post-deductible medical and prescription claims will need to be submitted by email, fax, mail or online.

D. Health Savings Accounts Contributions
  1. How much does IU Contribute to my Health Savings Account?

    When you are enrolled in the Anthem PPO HDHP, IU contributes $1,300 for those with employee-only coverage level or $2,600 for all other coverage levels.

    When you are enrolled in the IU Health HDHP, IU contributes $1,600 for those with employee-only coverage level or $3,200 for all other coverage levels.

    The contribution is made as one deposit into the employee’s HSA account and is not prorated.  The deposit is usually made with the second paycheck in January or the first paycheck after benefits have been elected in the case of a newly eligible employee.  However, those that enroll in the HSA on or after September 1st will not receive IU’s contribution to their account for that year.

  2. When does IU make its contribution to my Health Savings Account?

    For employees who elect the HSA plan during Open Enrollment, IU makes its annual contribution to your HSA account on the second paycheck in the month of January.

    For family status changes and new-hires, hired prior to September 1st, IU’s contribution is usually made by the second payroll after date of hire. However, the timing is dependent on when the new-hire benefit elections are made and if elections are made prior to payroll deadlines.

    Note: Access to those contributions is dependent on when the HSA account has been established with Nyhart.

    For new-hires hired on or after September 1st, no IU Contribution will be made for that calendar year.

  3. How do I contribute to my Health Savings Account?

    Your contributions are made through payroll deductions spread out equally over your pay periods (assuming a 12 month pay schedule). When you enroll in the HSA, you will have the opportunity to designate an annual amount between the minimum contribution of $300 up to the IRS statutory maximums: $3,400 when enrolled in employee-only coverage and $6,750 when one or more family members are included. Catch-up contributions of $1,000 annually are also an option for those who are or turn age 55 and older during the year. The IRS contribution maximums listed include both the IU contribution and the employee's contribution.

    When you leave the university, contact a tax advisor to learn if and how you can continue to contribute.

  4. If I go out on Leave or I am only paid 10 months out of the year, how does that affect my HSA contributions?

    When you select your annual pledge amount during open enrollment each year the system will automatically assume you will receive 12 or 26 paychecks for that year.  For example: if you select $1,200 for your annual pledge then you will have $100 taken from each of your monthly paychecks or $46.15 from each of your bi-weekly paychecks.

    If you start HSA contributions mid-year or you do not receive one or more regularly scheduled paychecks, then the system will look at how much of your annual pledge you have contributed year-to-date and calculate how many paychecks remain in the year and will break down the remaining annual pledge evenly over the remaining number of paychecks.  This way you will always meet your pledge amount by the end of the year regardless of how many actual paychecks you receive. See example below.

    Example: Annual Pledge:  $1200
    Jan $200 ($1200 / 12 paychecks)*
    Feb  $100
    Mar $100
    April  $100
    May No paycheck
    June $116.67 ($700 remaining pledge / 6 remaining paychecks)
    July $116.67
    Aug $116.67
    Sept $116.67
    Oct No paycheck
    Nov $233.33 ($233.33 remaining pledge / 1 remaining paychecks)
    Dec $0
    Total:  $1200 by year end

    *For monthly paid employees, January has two monthly paychecks. December has none.

  5. Can I contribute a lump sum amount to my HSA?

    Yes and No.  The payroll system is not able to accommodate one-time lump sum deductions for the HSA contribution.  Any amount elected for the HSA will automatically be designated as an annual amount to be taken from paychecks over the course of the year.

    However, you can make contributions to your HSA from sources outside of payroll. You can transfer money from a personal account directly to your HSA or you can send a check to Nyhart along with the appropriate deposit form. Any contributions put in your account on an after-tax basis are eligible to be deducted from your gross taxable income on your tax return.

    You are responsible for tracking your contributions to ensure you don't exceed the IRS annual contribution limits.

  6. How do I change the contribution amount taken from my paychecks?

    Complete the HSA Enrollment/Change Form (PDF) and return the completed form to IU Human Resources, ATTN: Records, Poplars E165, 400 E. 7th Street, Bloomington, IN 47405, or scan and email to , or fax to 812-855-3409.

    The contribution deducted from each remaining 2017 pay period will be automatically computed by the payroll system. The computation will take into account your new ANNUAL contribution request, subtract what you've already contributed, then divide by the number of remaining pay periods (assuming twelve months of pay periods). The number of remaining pay periods is determined by when the form is received and processing is completed. Pay calculations close approximately one week before pay is issued; forms received after a pay period closing are not processed until the following pay period.

    You may not reduce your annual amount below what you have contributed to date as refunds are not an option. The annual contribution must be an amount between the minimum and maximum amounts.

    Electronic signatures are accepted on this form.

  7. Can I make contributions to my HSA outside of payroll deductions?

    Yes, you can transfer money from a personal account directly to your HSA or you can send a check to Nyhart along with the appropriate deposit form.

    Any contributions put in your account on an after-tax basis are eligible to be deducted from your gross taxable income on your tax return.

    You are responsible for tracking your contributions to ensure you don't exceed the IRS annual contribution limits.

  8. Do IRS maximum contributions include the university's contribution?

    Yes, The IRS maximums are the combined total of IU contributions and the employee's contributions to their HSA account.

    Example: Employee elects 'Employee Only Coverage.' The IRS maximum for the 2017 year for employee only coverage is $3,400. IU contributes $1,300 to the HSA account for enrollment in the Anthem PPO HDHP. The employee is then eligible to contribute up to $2,100 before reaching the IRS maximum. ($3,400 = $1,300 + $2,100).

  9. What is the maximum contribution I can make to my Health Savings Account?

    The amount you can contribute to an HSA is set by federal regulations and is adjusted annually for inflation. For the 2017 tax year, the maximum annual contribution amount is $3,400 if you have employee-only coverage, and $6,750 if you cover one or more family members. If you turn 55 or older any time in 2017, you can also make an additional $1,000 “catch-up” contribution to your HSA.

    The IRS maximums are the combined total of IU contributions, employee's contributions to their HSA account, spouse’s contributions to their own HSA (if applicable), and contributions made to an Archer MSA (if applicable).

    The maximums can be further affected by the number of months you are covered under an HDHP. Examples:

    • If your HDHP was effective January 1st, and you maintain HDHP coverage for the entire plan year, the total amount you can contribute to your account is the full maximum contribution amount set by the IRS ($3,400 for employee-only or $6,750 for family coverage).
    • If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if age 55 or greater, so long as you start your HDHP coverage no later than December 1 of that year. In this case; however, you will be subject to a testing period. The testing period requires that you maintain HSA eligibility for a period beginning on December 1 of the year you started and ending on December 31 of the next year.
    • If your HDHP coverage ends mid-year, and is not continued through COBRA or through another employer’s HDHP plan, your maximum contribution amount is pro-rated based on the number of months your HDHP was in effect.

    Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS prorated maximum, you must work with the Nyhart to resolve the excess contribution issue. Excess contributions not withdrawn from the Health Savings Account are subject to a 6% excise tax until withdrawn. You should be aware of the reporting requirements for excess contributions as detailed in the Instructions for IRS Form 8889 (PDF).

    Caution: if this is your first year of HSA eligibility the amounts above may be reduced if you fail to meet a testing period. If you are an existing HSA owner, the amounts above may be reduced if you fail to maintain your eligibility for the full tax year.

    Contact Nyhart for instructions on how to remove “excess contributions” from your HSA at 800-284-8412 or at .

  10. What happens if I contribute more than the IRS annual maximum?

    You are responsible for tracking your contributions to ensure you don't exceed the IRS annual contribution limits.

    If your contributions have exceeded the IRS maximum, you must work with Nyhart to resolve the excess contribution issue. Excess contributions not withdrawn from the Health Savings Account are subject to income taxes and an additional 6% excise tax until withdrawn. You should be aware of the reporting requirements for excess contributions as detailed in the Instructions for IRS Form 8889 (PDF).

    Please contact your tax advisor if you have additional questions.

  11. What happens if I don’t withdraw my excess contributions prior to April 15th of the following year?

    You must pay a 6% excise tax on any excess contribution and on any earnings of the excess contribution. If in the next year you decreased your maximum contribution by the amount of your excess contribution made the year before, you do not have to pay the 6% excise tax again.  However, for as long as you leave the excess contribution in, you will need to pay an annual 6% excise tax on this amount and its earnings.

    Please contact your tax advisor if you have additional questions.

    Contact Nyhart for instructions on how to remove “excess contributions” from your HSA at 800-284-8412 or at .

    Review IRS Publication 969 (PDF) and Instructions for IRS Form 8889 (PDF) for further details.

  12. What are catch-up contributions?

    If you are an eligible individual who is age 55 or older by the end of your tax year, your contribution limit is increased by $1,000. For example, if you have employee-only coverage, you can contribute up to $4,400 for 2017 (the contribution limit for employee-only coverage ($3,400) plus the additional contribution of $1,000.)

    If you are an eligible individual for only part of the year, all contributions (including the catch-up contribution) would be pro-rated based on the number of months that you are an eligible individual. For example: You have the HDHP coverage at the employee-only level and you are eligible for the additional catch-up contribution of $1,000. In July you turned age 65 and enrolled in Medicare, thus making you no longer eligible to make HSA contributions on a tax-free basis. Your contribution limit would be $2,200 for 2017 ($4,400 IRS max / 12 months x 6 months of eligibility).

  13. If my spouse is age 55 or older, am I eligible to make the catch-up contribution?

    No. HSA accounts are individual accounts, not joint accounts. The primary accountholder must be the individual who is age 55 or older in order to make the catch-up contribution. If your spouse has their own HSA and is an eligible individual, they can contribute a separate catch-up contribution to their own HSA.

  14. Do I have to continue to fund my account each year?

    Each year that you elect to participate in the HSA, you must make the minimum contribution of $300. You are not required to contribute to your account above the minimum.

    You are not required to continue participation in the HSA each year. You may stay enrolled in an HDHP plan and waive the HSA or you can change to any other plan offered by the university. Be aware, however, when you are not enrolled in an HDHP you cannot contribute to the Health Savings Account component of the plan, but you can continue to use existing funds for qualified health expenses.

    If you STOP your HSA Contributions (not suspend), your account will become an “individual” account that is no longer associated with IU.  You will then become responsible for the monthly account maintenance fees (currently $2.50/month).

  15. What happens during the year if I have a qualified family status change?

    You will be able to continue contributing to the Health Savings Account; however, the maximum amount you are permitted to contribute will be the greater of the maximum annual HSA contribution based on your HDHP coverage on the first day of the last month of your tax year (December 1st) or the amount that results when you prorate appropriately for the number of months you were enrolled in each coverage level.

    Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF).

  16. I am age 65 and covered under an HDHP, can I still contribute to my HSA?

    Maybe. As long as you have not enrolled in Medicare Part A or B you will remain an eligible individual and may continue to make and receive pre-tax contributions to your HSA.

    Turning age 65 only makes you eligible to enroll in Medicare. Enrollment in Medicare part A is not automatic for most people. You would need to take action and enroll in Medicare benefits online if you want to receive Medicare coverage. You do not, however, need to enroll in Medicare if you want to continue to take advantage of the HSA. As long as you maintain group coverage (like on an IU medical plan) you can enroll in Medicare at a later time without penalty. However, be aware, that if you choose to delay your Medicare enrollment until after your initial eligibility period (age 65), when you do eventually enroll in Medicare, Medicare will set the effective date of your Medicare Part A coverage either back 6 months or to your 65th birthday, whichever is most recent. That may mean your eligibility to make contributions to your HSA will be prorated for the year.

    If you are drawing your or your spouse’s social security benefits, your enrollment in Medicare Part A will be automatic and you will no longer be eligible to make tax-free contributions to an HSA as of the effective date of your Medicare enrollment. Complete the HSA Enrollment/Change Form (PDF) to Stop your HSA Contributions. Then determine if you have excess contributions for that year. Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS maximum, you must work with Nyhart to resolve the excess contribution issue.

    If you STOP your HSA Contributions (not suspend), your account will become an “individual” account that is no longer associated with IU.  You will then become responsible for the monthly account maintenance fees (currently $2.50/month).

  17. I am collecting my social security benefits and covered under an HDHP, can I still contribute to my HSA?

    Not on a tax-free basis. If you are drawing your or your spouse’s social security benefits, your enrollment in Medicare Part A will be automatic and you will no longer be eligible to make tax-free contributions to an HSA as of the effective date of your Medicare enrollment.

    If you have become ineligible to make tax-free contributions to your HSA and still choose to participate in the HSA plan, you may do so, however none of the ineligible contributions are to remain in your HSA account at the end of the year.  Instead, you must remove all contributions that are not eligible to remain tax-free in your account as “excess contributions”.  Then report that amount on your federal tax return as taxable income.

    If you choose to no longer participate in the HSA, complete the HSA Enrollment/Change Form (PDF) to STOP your HSA Contributions. Then determine if you have excess contributions for that year. Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS maximum, you must work with Nyhart to resolve the excess contribution issue.

    If you STOP your HSA Contributions (not suspend), your account will become an “individual” account that is no longer associated with IU.  You will then become responsible for the monthly account maintenance fees (currently $2.50/month).

E. Using Health Savings Account Funds
  1. Am I required to track the expenditures made from my HSA?

    Yes, the individual who establishes the HSA is required to maintain a record of the expenses sufficient to demonstrate that the distributions were for qualified health expenses.

  2. Who will determine whether something is a "qualified health expense"?

    The IRS will make this determination based on disbursements reported on your annual tax return. You do not submit records with your IRS return, but it is your responsibility to maintain records for all of your expenses in the event the IRS requests them. Specifically, the IRS requires that you must be able to show that:

    • The distributions were exclusively to pay or reimburse qualified health expenses,
    • The qualified health expenses had not been previously paid or reimbursed from another source, and
    • The health expenses had not been taken as an itemized deduction in any year.

    After you open an HSA, you can use funds to pay for covered expenses that apply toward the HDHP annual deductible and co-insurance costs (e.g. medical services, prescriptions, mental health services, etc). You can also pay for qualified health expenses that your health plan might not cover, such as vision care (eyeglasses and contact lenses), dental and orthodontic services. Qualified health expenses also include long-term care premiums, Medicare premiums, Medicare co-pays, and COBRA premiums. Detailed information about qualified health expenses can be found in Section 213(d) of the Internal Revenue Code and IRS Publication 502. A Summary of the Eligible HSA Expenses (PDF) is also available.

  3. When can I use my Health Savings Account funds?

    You can use your funds as soon as they are deposited in the account. Remember this is different from the TSB plan, where the entire pledge is available on January 1. Health Savings Account funds only become available for use after they are deposited. 

    Funds in the HSA can only be used for expenses incurred from the date of the establishment of the HSA account. For newly enrolled employees, that would be the date the HSA account opened. For employees that transferred their HSA balances directly from another HSA account over to Nyhart, the HSA will be considered established as of the original date that the transferred HSA account was opened.

    Contact Nyhart for instructions on how transfer another HSA account to your Nyhart HSA at 800-284-8412 or at .

  4. How can I access my Health Savings Account funds?

    Once contributions are made to your account, you can access your funds in several different ways:

    • Use the IU Benefit Debit/Visa card at Healthcare Provider locations*. The IU Benefit debit/Visa card can be used at any healthcare provider, such as doctors’ offices, pharmacies, hospitals, labs, vision care providers, dental offices, chiropractor’s offices, etc.
      • Pay immediately by swiping your debit/Visa card at your provider’s office
      • Write the debit/Visa card number on the provider’s bill and return to your provider
    • Make an HSA Distribution online. Click on the Make HSA Transaction button on the Welcome page.
      • Send yourself one-time or repeating checks to reimburse yourself for healthcare bills that you paid out of another account or with cash (a $10 fee is charged for each check distribution sent to yourself)
      • Send a payment to a provider directly from your account (No fees for payments made to providers)
      • Transfer funds directly from your HSA account to a personal bank account (no fees apply).

    * Special rules apply to the use of the IU Benefit debit/Visa card when enrolled in both the HSA and the TSB Healthcare account.

  5. Can I use my account funds for services I received before I enrolled in the HSA?

    No. You can only use your savings for expenses incurred after your HSA is established. If you transferred your HSA balance from another HSA account over to Nyhart, your account is considered to have been established as of the date the prior account was established. Which means that you can use the funds in your HSA for any expense that you incurred since the original date that your transferred HSA was established.

  6. Is there a time restriction on when I may use the funds in the account?

    No, you may reimburse yourself for an expense with future contributions or past contributions and there is no time limit on this. The only restriction is that the service must have occurred after the HSA account was opened (and you were enrolled in the HDHP plan).

  7. I understand that I can reimburse myself from my HSA for qualified health expenses that I pay out-of-pocket but is there a time limit? Do I need to reimburse myself in the same year?

    You have your entire lifetime to reimburse yourself. As long as you had your HSA established at the time the expense was incurred, you saved the receipt, and it was not otherwise reimbursed, you can reimburse yourself for the expense from your HSA even years later.

  8. Is there a minimum reimbursement amount I can request from my Health Savings Account fund?

    No.

  9. Is there a maximum amount I can use or withdraw from my account?

    You can only withdraw an amount equal to the balance in your account. Check your balance online prior to withdrawing funds to avoid Insufficient Funds fees or denial of the charge.

  10. Can I use my Health Savings Account to pay for medical services provided in other countries?

    Yes. The IU Benefit card can be used at any healthcare provider, anywhere Visa is accepted.

    You are responsible to verify that the expense is considered a qualified medical expense under Section 213(d) of the Internal Revenue Code and IRS Publication 502.

  11. Can I use the money in my HSA to pay for health care for a family member?

    Yes, you may withdraw funds to pay for the qualified health expenses of you, your spouse* or an IRS-qualified tax dependent without tax penalty. This is true even if they are not covered on your HDHP plan.

    * A spouse means one by marriage, either opposite-sex or same-sex, legally entered into in one of the 50 states, the District of Columbia, or a U.S. territory or a foreign country. Spouses qualify for preferential federal tax treatment of health care benefits.

    ** Please note that the healthcare reform law has made it possible for parents to keep children up to age 26 on their health plans if they have no other coverage – even those who are married and living away from home. However, HSA funds can only be spent on family members who qualify as tax dependents as defined by IRS tax rules. In order to be treated as a qualifying child, an individual must not have attained the age of 19 years old, or 24 if a student, before the close of the tax year.

    See the IRS rules for “A Qualifying Child”.

  12. If my child is disabled does that affect their status as a qualifying child?

    Yes. The age requirement (i.e., that the qualifying child be less than 19 years old, or 24 if a student) does not apply if the child is permanently and totally disabled.  If an individual experiences the permanent and total disability at any time during the calendar year, he or she will not be required to satisfy the age requirement.

  13. If my child turns age 19 (or 24 if a student) during the year, can I still use my HSA funds for their expenses?

    No.  IRS rules require that the child not attain the specified age (age 19 or 24 if a student) as of the close of the tax year. The child attains their specific age on the anniversary of the date the child was born. 

  14. What if my health expenses are more than my Health Savings Account balance?

    You will have to pay, out-of-pocket, the difference between your expenses and your Health Savings Account balance. Check your balance online prior to withdrawing funds to avoid Insufficient Funds fees.   As additional funds are deposited into your HSA account you can then reimburse yourself for those prior expenses.

  15. What happens if I cancel my high deductible health plan (HDHP)?

    When your HDHP coverage ends, you are no longer eligible to make Health Savings Account contributions. However, the money in your HSA is yours until you spend it*.  As a result, you may keep your HSA with Nyhart and continue to use the funds to pay for qualified expenses. When you are no longer an active employee on the IU HSA plan, you will then be responsible for the HSA account maintenance fees (see Fee Schedule (PDF)).

    If you are eligible again, i.e., enrolled in a HDHP, you may make additional contributions to your HSA.  Please remember that you are responsible for tracking your personal contribution limit (including coordination of contributions should your spouse also contribute to an HSA) and contact your tax advisor if you have additional questions about your specific situation.

    *Note, if you term your HDHP coverage during a tax year, your maximum contribution for that year is prorated based on the number of months that you were enrolled in an HDHP plan.  

  16. What are my options if I withdraw my money from my Health Savings Account in error?

    You can return the money to the account if there is clear and convincing evidence that the withdrawal was a mistake. You can contact Nyhart and request a Return of Mistaken Distribution form. This money must be repaid by April 15th of the year following the error.

  17. I have an HSA but no longer have HDHP coverage. Can I still use the money that is already in the HSA for health expenses tax-free?

    Once funds are deposited into the HSA, the account can be used to pay for qualified health expenses incurred after the account was opened. These expenditures are tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds except that you cannot use the funds for expenses incurred before the HSA was opened.

  18. What happens to the money in the Health Savings Account fund after I turn age 65?

    You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, co-pays, and co-insurance under any part of Medicare.

    Once you turn age 65 you can also use your account to pay for things other than qualified health expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-health expenses must pay income tax and a 20% penalty on the amount withdrawn.

  19. Can I borrow against the money in my HSA?

No. You may not borrow against it or pledge the funds in it. For more information on prohibited activities, see Section 4975 of the Internal Revenue Code.

F. Health Savings Account Recordkeeping
  1. What kind of records do I need to keep?

    You must keep records sufficient to show that:

    • The distributions were exclusively to pay or reimburse qualified health expenses,
    • The qualified health expenses had not been previously paid or reimbursed from another source, and
    • The health expenses had not been taken as an itemized deduction in any year.

    Do not send these records with your tax return.  Keep them with your tax records.

  2. What kind of records can I use in case I get audited?

    You can use the following type of records:

    • Hard-copy receipts from healthcare providers (bills from the doctor’s office or hospital, receipts from the pharmacy, etc.)
    • Bank statements from your HSA account
    • Claims information from your Castlight account
    • Claims information or Explanation of Benefit Statements from your insurance provider
  3. How long should I save receipts?

    Save your receipts for at least three years. The IRS will generally not look back further than three years due to a Statute of Limitations beyond that point. Keep in mind, if the IRS suspects fraud, they will disregard the Statute of Limitations and look back as far as they think is necessary.

  4. What if my health expenses are more than my Health Savings Account balance?

    You will have to pay, out-of-pocket, the difference between your expenses and your Health Savings Account balance. Check your balance online prior to withdrawing funds to avoid Insufficient Funds fees. As additional funds are deposited into your HSA account you can then reimburse yourself for those prior expenses. 

  5. What are my options if I withdraw my money from my Health Savings Account in error?

    You can return the money to the account if there is clear and convincing evidence that the withdrawal was a mistake. You can contact Nyhart and request a Return of Mistaken Distribution form. This money must be repaid by April 15th of the year following the error.

  6. Do I have to keep receipts showing what I withdrew from my account?

    Yes, you should keep your receipts. If you are audited by the IRS, you will need to justify your expenditures.

  7. Do I need to file claims with an HSA?

    No. You pay qualified expenses using your IU Benefit debit card. If you use another form of payment (e.g., cash or a personal check), then you can reimburse yourself by transferring funds online. If requested by the IRS, you must be able to show that the withdrawals were exclusively for health expenses.

  8. Who will keep track of when I have hit the deductible and am eligible to pay medical expenses out of my TSB?

    For the Anthem PPO HDHP, Anthem tracks your deductible. For the IU Health HDHP, IU Health tracks your deductible. You will need to monitor the Explanation of Benefits (EOB) statements sent by Anthem or IU Health after medical transactions. This statement will list the cumulative charges applied towards your annual deductible. Once you meet the deductible (for the Anthem PPO HDHP: $1,300 for single coverage and $2,600 when one or more family members are covered; for the IU Health HDHP: $2,500 for single coverage and $5,000 when one or more family members are covered) you will need to send this statement to Nyhart as proof that you have satisfied the deductible. After Nyhart receives this information from you, they will allow payment of medical expenses out of your TSB. However, the debit/Visa card will only pull medical and prescription expenses from the HSA account. To use the funds in the TSB for post-deductible medical and prescription expenses, you will need to pay for the expense out-of-pocket then submit a claim for reimbursement to Nyhart. All post-deductible medical and prescription claims will need to be submitted by email, fax, mail or online.

  9. How can I keep track of my account balance?

    You can track your HSA account activity online at Nyhart’s secure Web site anytime day or night. Information on how to access this site will be made available in the welcome packet sent to you after enrollment in the plan. You can check your account balance, look at transaction activity or download account statements. You can also setup the Online Account Alerts service to automatically notify you when certain activities occur. Additionally, you can contact Nyhart Member Services at 1-800-284-8412 or at .

    It is your responsibility to review your account on a periodic basis. Contact Nyhart Member Services immediately if you notice any discrepancies in your account activity.

  10. What happens if I lose my debit card?

    Call Nyhart Member Services immediately at 800-284-8412. A replacement card fee may apply.

  11. What happens if I incur bank fees (e.g. insufficient funds fee, check fee, etc.)?

    Amounts withdrawn from an HSA for administration and account maintenance are not treated as a taxable distribution and will not be included in the HSA owner’s gross income. Nyhart will report amounts withdrawn from the HSA to pay HSA administration and account maintenance fees on Form 5498-SA in the fair market value (FMV) of the HSA at the end of the taxable year.

G. Tax Implications

See also: HSA Tax Resources and Information

  1. Will Nyhart ask me to substantiate that my withdrawals are for health expenses?

    No. Nyhart will send you and the IRS a 1099-SA form at the end of the tax year to report distributions from your account and form 5498-SA in May to report contributions made to your account. You will file form 8889 with your 1040 federal tax filing. If the IRS requests substantiation, you must provide it or pay taxes and penalties on unsubstantiated withdrawals.  Specifically the IRS requires that you must be able to show that:

    • The distributions were exclusively to pay or reimburse qualified health expenses,
    • The qualified health expenses had not been previously paid or reimbursed from another source, and
    • The health expenses had not been taken as an itemized deduction in any year.
  2. Can I use my Health Savings Account to pay for non-health related expenses?

    The HSA is designed to provide tax-free contributions to be made and used only for qualified health expenses.

    If you are age 64 or younger, you can use the account for non-qualified purposes, however, IRS regulations stipulate that these withdrawals will be subject to income tax and an additional 20% tax penalty will apply.

    If you are age 65 or older, you can use the funds in your HSA account for non-qualified purposes without penalty but would be responsible for paying income taxes on the amount used.

  3. How does the HSA affect my taxes?

    Contributions may be made either directly by you to your HSA or by payroll deduction. Either way, your contributions are not subject to federal income tax, FICA (Social Security and Medicare) tax and for most states, state income tax. If you make your contributions through payroll deductions, the amount is taken from your payroll before taxes are calculated. If you make deposits directly to your account you may take an above the line deduction when filing your annual tax return. "Above the line" means you reduce your taxable income regardless of whether you itemize or use the standard deduction on your income tax form. You may deduct the contribution amount, subject to the maximum annual contribution limits from your taxes, at filing time.

  4. Is tax reporting required for an HSA?

    Yes. IRS form 8889 must be completed with your tax return each year to report total deposits and withdrawals from your account.

    You do not have to itemize to complete this form.

  5. Do I need to itemize on my tax return? What does the IRS require me to report on my taxes?

    No, you will not need to itemize on your return.  However, the IRS requires that you complete and submit the Form 8889 with your tax return. On this form you will report all employer contributions to the account (including your contributions made by payroll deduction).  In addition, you will report your qualified distributions.  Please contact your tax advisor to discuss your specific situation.

  6. Income Tax Filing

    When you file your federal income tax return, you have to include your HSA information. You should use IRS Form 8889 to report your HSA contributions (including those made on your behalf, and IU's contributions). It should also be used to report any distributions from your HSA. You will need to file this form with your Form 1040 or Form 1040 NR.

    To assist you, you will receive a W-2 statement from the University, a Form 1099-SA and Form 5498-SA from Nyhart. For advice about tax matters consult your personal tax advisor or the IRS help line at 1-800-TAX-1040 (800-829-1040).

  7. What is Form 1099-SA?

    This form is used to report all withdrawals (distributions) from the HSA to the Internal Revenue Service (IRS). Nyhart files a copy electronically with the IRS. Nyhart posts this form to account holders’ online accounts in January for the prior year. You can access your tax statements on-line. Go to iu.nyhart.com, log into your HSA and select the Statements tab.

  8. What is Form 5498-SA?

    This form is used to report all contributions made to the HSA in a given tax year to the Internal Revenue Service (IRS). Nyhart files a copy electronically with the IRS. Nyhart posts this form to account holders’ online accounts in May for the prior year. To help you when filing your annual taxes, you can find your annual contribution details online. You can also find this detail in your Year End Account Summary statement. Go to iu.nyhart.com to access your information online.

  9. My HSA deduction is shown in Box 12 of my W-2 as Code W.  Why is it designated as an employer contribution when I have contributed the money to the account?

Consistent with applicable IRS guidelines, HSA deductions reported on your W-2 in Box 12 includes contributions made by the employer and employee contributions made through a section 125 cafeteria plan as a pre-tax salary deferral.  When you prepare your taxes at year-end, you are required to complete an additional tax form.  Form 8889 and instructions are available at www.irs.gov.  You will report the figure in Box 12 on line 9 of Form 8889 (as of 2016).

H. Investment Options
  1. How do I open an investment account?

    An investment account can be opened when there is at least $1,000 in your HSA cash account to open the investment account with. Once opened an array of investment options are available.

    • All initial investing and any trades can be done online at any time.
    • The earnings on your HSA investments, if any, are also tax-free.
    • An investment in a mutual fund is not insured or guaranteed by the FDIC or any other government agency. It is possible to lose money by investing. Investors should carefully consider the investment objectives, risks, charges and expenses of the fund. Please carefully read the prospectus, which contains this and other important information before you invest money.
    • To get more information about the Investment Services:
      1. Go to the Nyhart website (iu.nyhart.com), login and click on “View my Balances”
      2. On the Welcome screen, click on the “Manage Investments” button in the left hand column.
      3. On the Accounts/Investment Summary page, select “Manage Investments” on the right in order to create an investment account or to change your investment selections.

    For investment advice and assistance you can contact a Nyhart registered representative at 800-284-8412.

    See the HSA Investment Options (PDF)

    See the HSA Banking Fees (PDF)

  2. When can I begin making investments?

    You will need to have an HSA Cash Account balance of at least $1,000 to open an HSA Investment Account, as your initial investment must be $1,000 or more.

  3. Are there any fees associated with the Investment Account?

    There is a quarterly custodial management fee of 25 Basis Points per annum investment in mutual funds.

    Mutual fund investment selections are offered without front-end or back-end loads, however some funds have fees for early redemption. There is a $10.00 transaction fee per call for mutual fund trades and Automatic Investing requests that you place with a registered representative over the telephone. There are no fees for fund trades done online.

    See the HSA Banking Fees (PDF)

  4. What investment options are available?

    Choose from a wide range of mutual funds. Your investment choices include a variety of funds - asset allocation, fixed income and equity mutual funds – all supporting a range of investment objectives and time horizons. You can review the full list of investment choices online or speak with a registered investment representative by contacting Nyhart at 800-284-8412.

    See the HSA Investment Options (PDF)

  5. How do I invest in mutual funds?

    You can purchase, exchange and redeem mutual funds on the Nyhart HSA Member website (iu.nyhart.com). There is no trading fee when done online. You can also contact Nyhart's dedicated registered representatives to place a trade by calling 800-284-8412. However, a fee will apply for trades placed by phone.  

  6. How long does it take to transfer funds or make a trade?

    All transfers and trades requested and accepted before 3:30 PM Eastern time during normal trading days will be processed at the close of that day. The transfers will be posted to your account the next business day.

  7. Can I make deposits directly into my HSA Investment Account?

    No, you can only make deposits to the HSA Cash Account. Once funds are available in the HSA Cash Account, you can transfer funds to the Investment Account on the Nyhart HSA Member Website.

  8. Can funds in my HSA Investment Account be used to pay for eligible health expenses?

    If you want to use HSA Investment Account assets to pay for health expenses, you must first redeem mutual funds and transfer the required balance to the HSA Cash Account. HSA Investment Account funds cannot be accessed using a debit card.

  9. How often will statements and transaction confirmations be provided?

    You will receive a monthly on-line statement for your HSA Investment Account. If you would like paper statements, you may order them through Nyhart for a monthly fee. When there is transaction activity, you will also receive a trade confirmation.

  10. How do I manage my HSA investment account balances?

    You can manage your investment account on the Nyhart HSA Member Website (iu.nyhart.com) which provides access to investment balances and investment activity. You can also contact one of Nyhart’s registered representatives by calling 800-284-8412.

  11. Are my investments protected against loss?

    No, an investment in a mutual fund is not insured or guaranteed by the FDIC or any other government agency. It is possible to lose money by investing. Investors should carefully consider the investment objectives, risks, charges and expenses of the fund. Please carefully read the prospectus, which contains this and other important information before you invest money.

    For investment advice and assistance you can contact a Nyhart registered representative at 800-284-8412.

    See the HSA Investment Options (PDF)

I. Turning Age 65 and your HSA
  1. I keep getting all these notices telling me to enroll in Medicare.  Do I have to enroll in Medicare when I turn 65?

    It depends. If you are going to begin drawing your social security income benefits, then you will be automatically enrolled in Medicare and will not have the option to waive out of coverage.

    If you are not drawing your social security income yet, and you are currently covered by a group health plan (like IU’s medical plans), then you can postpone enrollment in Medicare parts A, B & D until you are no longer employed (i.e. retired).  Remaining on a group medical plan allows you to be eligible for a “Special Enrollment Period” once you leave. There is no late enrollment penalty if you sign up for Medicare during a Special Enrollment period.

    Postponing enrollment in Medicare allows you to extend the time you have to contribute to your HSA. However, be aware, that if you choose to delay your Medicare enrollment until after your initial eligibility period (age 65), when you do eventually enroll in Medicare, Medicare will set the effective date of your Medicare Part A coverage either back 6 months or to your 65th birthday, whichever is most recent. That may mean your eligibility to make contributions to your HSA will be prorated for the year.

    For more information go to the Medicare website and read their “Medicare and You” handbook.

  2. What happens if I enroll in Medicare?

    As of the effective date of your enrollment in Medicare, you are no longer eligible to make tax-free contributions to your HSA.

    If you enroll mid-year in Medicare, your contribution maximum for that year will be pro-rated based on the number of months that you were an eligible individual.

    For example:

    • You enroll in Medicare effective May 1, 2017.
    • You will have been an eligible individual for only 4 months (January, February, March and April). 
    • You would only be eligible to contribute 4/12ths of the IRS annual maximum to your account (don’t forget to include the catch-up contribution).
      • Employee only coverage =  $4,400 annual maximum x 4/12ths = $1,467
      • Family coverage = $7,750 annual maximum x 4/12ths =  $2,583
    • Any amounts contributed to your HSA account (IU’s contributions plus your own contributions) in excess of those figures would be considered to be “excess contributions” by the IRS and would not be eligible to remain tax-free in your HSA account.

    Contact Nyhart for instructions on how to remove “excess contributions” from your HSA at 800-284-8412 or at .

    Review IRS Publication 969 (PDF) and Instructions for IRS Form 8889 (PDF) for further details.

  3. Can I still use my HSA funds tax-free after I turn 65?  After I sign up for Medicare?

    Yes!  For however long you maintain a balance in your HSA account you can continue to use that balance tax-free for IRS qualified health expenses.

    Additionally, since you are now age 65, the IRS allows you to use the funds in your HSA for other expenses as well.  Any funds that you use for non-qualified health expenses (i.e. rent, groceries, vacation, etc.) you would need to report at year end as “taxable income” and pay taxes on the amount spent, however, you would not have to pay any penalty for using those funds for non-health related expenses.

  4. What happens if I don’t withdraw my excess contributions prior to April 15th of the following year?

    You must pay a 6% excise tax on any excess contribution and on any earnings on the excess contribution dollars. If in the next year you decreased your maximum contribution by the amount of your excess contribution made the year before, you do not have to pay the 6% excise tax again. However, for as long as you leave the excess contribution in, you will need to pay an annual 6% excise tax on this amount and its earnings.

    Please contact your tax advisor if you have additional questions.

    Contact Nyhart for instructions on how to remove “excess contributions” from your HSA at 800-284-8412 or at .

    Review IRS Publication 969 (PDF)  and Instructions for IRS Form 8889 (PDF) for further details.

  5. I am collecting my spouse’s social security benefits and covered under an HDHP, can I still make tax-free contributions to my HSA?

    No. If you are drawing your or your spouse’s social security benefits, your enrollment in Medicare Part A will be automatic and you will no longer be eligible to make contributions to an HSA as of the effective date of your Medicare enrollment. Complete the HSA Enrollment/ Change form (PDF) to suspend or stop your HSA Contributions. Then determine if you have excess contributions for that year. Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS maximum, you must work with Nyhart to resolve the excess contribution issue.

    If you choose to continue to participate in the HSA plan when you are ineligible to make tax-free contributions, you will need to complete a distribution request form each year to remove all ineligible contributions (IU’s contribution and your contributions) and any earnings on those contributions and then claim those dollars on your annual income tax return as taxable income.

    Contact Nyhart for instructions on how to remove “excess contributions” from your HSA at 800-284-8412 or at .

    Review IRS Publication 969 (PDF)  and Instructions for IRS Form 8889 (PDF) for further details.

J. Leaving the University
  1. What if I don’t use all my contributions before I leave the university?

    When leaving the university, you take the money with you, and:

    • Continue to use the money tax-free for qualified health expenses, or
    • pay taxes and IRS penalties for other expenses (If you are over age 65, you pay taxes, but have no penalty)
  2. What happens to my account funds if I leave my job or switch to a non-HDHP plan?

    When your HDHP coverage ends, you are no longer eligible to make tax-free Health Savings Account contributions. However, the money in your HSA is yours until you spend it*. As a result, you may keep your HSA with Nyhart and continue to use the funds to pay for qualified expenses. When you are no longer an active employee on the HSA, you will then be responsible for the HSA account maintenance fees (see Fee Schedule (PDF)).

    If you become eligible again, i.e., enrolled in a HDHP, you may make additional contributions to your HSA. Please remember that you are responsible for tracking your personal contribution limit (including coordination of contributions should your spouse also contribute to an HSA) and contact your tax advisor if you have additional questions about your specific situation.

    *Note, if you term your HDHP coverage during a tax year, your maximum HSA contribution for that year is prorated based on the number of months that you were enrolled in an HDHP plan.

  3. What is the maximum contribution I can make to my Health Savings Account?

    The amount you can contribute to an HSA is set by federal regulations and is adjusted annually for inflation. For the 2017 tax year, the maximum annual contribution amount is $3,400 if you have employee-only coverage, and $6,750 if you cover one or more family members. If you're 55 or older, you can also make an additional $1,000 "catch-up" contribution to your HSA.

    The IRS maximums are the combined total of IU contributions, employee's contributions to their HSA account, spouse's contributions to their own HSA (if applicable), and contributions made to an Archer MSA (if applicable).

    The maximums can be further affected by the number of months you are covered under an HDHP.

    Examples:

    1. If your HDHP was effective January 1st, and you maintain HDHP coverage for the entire plan year, the total amount you can contribute to your account is the full maximum contribution amount set by the IRS ($3,400 for employee-only or $6,750 for family coverage).
    2. If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if age 55 or greater, so long as you start your HDHP coverage no later than December 1 of that year. In this case; however, you will be subject to a testing period. The testing period requires that you maintain HSA eligibility for a period beginning on December 1 of the year you started and ending on December 31 of the next year.
    3. If your HDHP coverage ends, and is not continued through COBRA or through another employer's HDHP plan, your maximum contribution amount is pro-rated based on the number of months your HDHP was in effect.

    Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS prorated maximum, you must work with Nyhart to resolve the excess contribution issue. Excess contributions not withdrawn from the Health Savings Account are subject to a 6% excise tax until withdrawn. You should be aware of the reporting requirements for excess contributions as detailed in the instructions for IRS Form 8889.

    Caution: if this is your first year of HSA eligibility the amounts above may be reduced if you fail to meet a testing period. If you are an existing HSA owner, the amounts above may be reduced if you fail to maintain your eligibility for the full tax year.

    Please contact your tax advisor if you have additional questions.

  4. I am currently enrolled in an HDHP and HSA, but plan to leave the university. Can I continue the HDHP and HSA after I have separated from the university?

    Yes, you may retain enrollment in the plan for up to 18 months through COBRA continuation coverage. The University will no longer make contributions to your Health Savings Account via pre-tax payroll deductions, but as long as you are enrolled in a HDHP, you are still allowed to put tax-free contributions into your Health Savings Account up to the IRS allowed maximum. Any contributions put in your account on an after-tax basis are eligible to be deducted from your gross taxable income on your tax return.

  5. I am currently on COBRA continuation coverage; can I elect an HDHP and HSA during open enrollment?

    Yes, you may elect an HDHP plan. However Indiana University will not make a contribution to or open a Health Savings Account for you. If you choose to open an HSA, you will be entirely responsible for opening the account and all associated fees.

  6. Can I use my HSA to pay for COBRA premiums?

    Yes.  COBRA premiums are an IRS qualified health care expense.
    IU COBRA premiums have to be paid with a check or money order.  You can use your HSA funds to pay your premiums in two ways:

    1. Use the “Make an HSA Transaction” feature online from your Nyhart HSA account, sending a distribution to COBRA
    2. Send a check from your personal bank account then use the “Make an HSA Transaction” feature online, transferring funds from your HSA to your personal bank account to reimburse yourself for the cost of the premiums

    See the HSA Quick Start Guide (PDF) for instructions on how to make an HSA transaction online.

    Learn more about your COBRA benefits.

  7. Do I have to contribute the full $300 minimum before I leave?

    No, The $300 minimum contribution only applies to employees who enroll in the HSA and remain an active employee through the end of the year.

  8. Will IU make their contribution to my HSA if I’m on COBRA?

    No, IU will only make a contribution to your HSA account when you are an actively employed eligible individual.

  9. Will I have to return any of IU’s contribution to my HSA if I leave mid-year?

    No, once a contribution has been made to your HSA account, it is yours.  You may, however, owe taxes on any contributions made to your account that exceed the IRS prorated contribution maximum.

    Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF). If your contributions have exceeded the IRS prorated maximum, you must work with Nyhart to resolve the excess contribution issue. Excess contributions not withdrawn from the Health Savings Account are subject to a 6% excise tax until withdrawn. You should be aware of the reporting requirements for excess contributions as detailed in the instructions for IRS Form 8889.

    Caution: if this is your first year of HSA eligibility the amounts above may be reduced if you fail to meet a testing period. If you are an existing HSA owner, the amounts above may be reduced if you fail to maintain your eligibility for the full tax year.

    Please contact your tax advisor if you have additional questions.

  10. What are the account fees associated with my Nyhart HSA?

    Indiana University will pay the basic monthly account maintenance fee for the Cash account as long as you are an active employee in the HSA. The basic fee covers online account activity and reporting and two debit/VISA cards.

    When you separate from the university or switch to a different IU medical plan, you will be responsible for all account fees (currently $2.50/month for the Nyhart HSA Cash Account). There are no transaction fees for using the card at point of sale. However, additional fees do apply for things like insufficient funds, additional cards, checks, etc. A complete Fee Schedule (PDF) is available.

  11. Can I transfer my HSA to another HSA account?

    Yes. Complete a “Trustee-to-Trustee Transfer” form from your new HSA provider and they will have your Nyhart account balance transferred to your new account. This type of transfer is free and does not count toward the IRS contribution maximum.

  12. Can I transfer my HSA to my spouse’s HSA?

    No. An HSA is an individual account in your name. You cannot combine it with an account in someone else’s name.

  13. Can I remove all the funds and close my HSA?

    Yes. However, if you remove your funds from the HSA for non-healthcare related expenses you will then be subject to income taxes on the amount removed, AND, if you are under age 65, you will also be subject to a 20% penalty.

  14. What do I do with my HSA if I am moving out of the country?

    You can continue to keep this account and continue to use it, tax-free, for your healthcare expenses. The Benefit card (debit/Visa) can be used at healthcare providers anywhere that VISA is accepted.