Human Resources

IU’s Health Savings Account (HSA), administered by WEX, 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 annual contribution limits, the eligibility rules, as well as the list of eligible expenses. See sections D and E of these FAQs for more details.

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.

When you enroll in an 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 is greater than $1,000.)

If you enroll in the HSA as a new hire or during Open Enrollment, IU will automatically send your application to WEX to open an HSA for you. The application process includes the Identity Verification (IDV) process of the USA Patriot Act. The IDV 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, WEX will contact you by email, phone or mail to request additional documentation. If you do not respond to their request promptly, it could delay the opening of your HSA. If you do not complete the IDV process successfully within 90 days, your HSA election will be cancelled and any contributions you have made will be refunded back to you.

Once your HSA has been opened, WEX will automatically send you two IU Benefit Cards (debit-type Visa cards that can be used to access your funds and pay for eligible services) and additional information regarding your account. Be sure to activate your new cards by following the instructions in the mailer.

Once your HSA is set up with WEX they will automatically issue two IU Benefit Cards in your name to your home address. If you would like additional cards, you can request them for a fee by logging in to iu.nyhart.com (web address will change 5/1).

Debit card. This card is attached to a deposit account and not to a credit account but may be used at any healthcare provider that accepts VISA.

The card can be run as debit or credit. If you wish to run the card as debit, you must set up a PIN first. The card cannot be used at an ATM or to get cash back after a purchase.

IU’s contribution to your HSA depends on your level of coverage and your employment status at the time of the contribution. For 2024, IU’s annual contribution is:

• $1,300 for employee-only coverage
• $2,600 for all other coverage levels.

This annual contribution is made in two installments. If you enroll in the HSA during Open Enrollment, you will receive half of IU's contribution in January, and the other half in July as long as you are an active employee enrolled in the plan when the contribution is made. For mid-year elections (e.g. new hires, life event changes), IU’s contribution is typically made by the second payroll cycle after you make your election; however, the timing depends on when the election is made and on payroll deadlines.

Employee contributions will continue to be deposited with each paycheck.

If you enroll in the HSA or make changes to your coverage on or after October 1 you will not receive IU’s contribution (or an adjustment to IU’s contribution) for that year

After you open your HSA, you can use the funds to pay for covered expenses that apply toward your annual HDHP deductible and coinsurance amounts. You can also pay for qualified health expenses that your health plan might not cover, such as vision care and dental and orthodontic services. Qualified health expenses also include long-term care, Medicare, and COBRA premiums, as well as Medicare copays.

The following list includes some common healthcare expenses that can be paid using HSA funds. This list is not all-inclusive and is subject to change by the IRS. Detailed information about qualified health expenses can be found in Section 213(d) of the Internal Revenue Code and IRS Publication 502.

• Diabetic supplies
• Eye exams, eyeglasses, contact lenses and solutions
• Hearing aids
• Laser eye surgery
• Orthodontia, dental cleanings and fillings
• Prescription drugs
• Certain over-the-counter medications
• Menstrual care products
• 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 for long-term care insurance, Medicare, COBRA, and the IU Blue Retiree Plan
• Personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 (e.g. face masks, hand sanitizer, and sanitizing wipes)

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.

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
• 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

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.

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

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

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 made online at iu.nyhart.com (web address will change 5/1). If you want to assign beneficiary rights to your estate, please contact WEX directly at 800-284-8412.

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 $2.75/month for the WEX HSA Cash Account). However, additional fees do apply for things like insufficient funds, additional cards, issuance of checks, etc. A complete HSA Fee Schedule is available.

To protect your personal health information (PHI), you will need to complete an Authorization to Disclose Information form. This form will allow WEX 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 Authorization to Disclose Information form can be found on the WEX website at iu.nyhart.com (web address will change 5/1) in the HSA Forms and Resources area. It will require the signature of an IU Human Resources representative or a notary.

Yes. Complete a HSA Transfer form and WEX will have your old account balance transferred to your new WEX account. There are no fees for this type of transfer. The transfer amount is not included in the current tax-year IRS contribution maximum; however, if you made current tax-year contributions to your previous HSA, then the amount of those contributions will count towards your current tax-year IRS contribution maximum.

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