HSA Frequently Asked Questions (FAQ)

A. Account basics

Nyhart Login Instructions

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 at any healthcare provider that accepts VISA.

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

IU’s contribution is dependent on the plan and level of coverage you are enrolled in.


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

IU Health HDHP

    • $1,600 for employee-only coverage
    • $3,200 for all other coverage levels.

IU’s annual contribution is deposited into your HSA as one lump sum and is not prorated. If you elect the HSA during Open Enrollment, IU’s contribution is made with your second paycheck in January. For mid-year elections (e.g. new hires, life event changes), IU’s contribution is typically made by the second payroll cycle after your election is made; however, the timing depends on when the election is made and on payroll deadlines. Access to those funds depends on when the HSA is established with Nyhart.

Mid-year enrollments or coverage changes on or after September 1 do not receive IU’s contribution (or an adjustment to IU’s contribution) 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 coinsurance 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 copays, 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 HSA Eligible Expense List 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
  • Certain over-the-counter (OTC) 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: Long-Term Care, Medicare, COBRA
  • Personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 (e.g. face masks, hand sanitizer, and sanitizing wipes)

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.

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

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 $2.75/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 HSA Fee Schedule 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 HSA Transfer form 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.

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