Financial / HSA

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Health Savings Account (HSA)

What is a Health Savings Account(HSA)?  An HSA is an account that lets you set aside money before taxes to pay for medical expenses for yourself, your spouse and eligible dependents.

Did you know the Blue Cross Blue Shield Illinois HDHP (HSA-Eligible) Plan uses the same network providers as the Blue Cross Blue Shield Illinois PPO Medical Plan?

Other than the HDHP Plan’s lower per pay period contributions and lower annual out-of-pocket max, the primary difference is how you pay for eligible medical expenses such as the deductible, co-insurance, prescriptions, etc.  Here’s a full list of  eligible medical expenses you may pay for with HSA funds.

If you qualify to make/receive HSA contributions you may open an HSA when enrolling in the HDHP plan. Consider the HSA as part of your retirement savings strategy. Your HSA balance grows over time through contributions as well as investments (if you choose to invest) and interest earnings—all tax-free. While you are not required to contribute to an HSA, more than half of Smiths Group employees have already enrolled.

Tax Advantages – the “triple-tax advantage”:

  • Money is set aside from your paycheck before taxes
  • All withdrawals used to pay for qualified expenses are untaxed
  • Anything your HSA dollars earn through interest or investing is tax-free

Typically you cannot have both an HSA and an FSA, but as a benefit enhancement, Smiths is offering a new Limited Purpose FSA which employees may have at the same time as an HSA, and it can be used for Vision and Dental expenses. That way, you can save your HSA funds for medical expenses! To find out more, check out the FSA page.

The account and balance stay with you, it’s your health savings account!

How does it work?

  1. During enrollment, you must sign up for a high-deductible health plan and then sign up for an HSA.
  2. Choose how much money you’d like to have deducted from your paycheck each pay period to put into your HSA
  3. You can use these funds immediately, up to the amount that’s been put into your account.
  4. When paying for eligible expenses, use your BenefitsAssist debit card for purchases or use personal funds and get reimbursed.

Why should I enroll in an HSA?

You can save on near-term expenses ADN see long term benefits from having an HSA as part of your retirement savings plan.

  • Your HSA is yours for life – even if you leave your employer
  • Unused HSA funds continue to roll over and gain interest, tax-free
  • You can invest your HSA funds to maximize their growth

Helpful Tips

Plan ahead to maximize your HSA

  • Calculate how much you normally spend on health-related expenses in a year – are there reoccurring items?
  • Consider whether you can afford to set aside a little extra to save for future health expenses or retirement needs.
  • Use this information to figure out how much to contribute to your HSA.
  • Be aware there is an annual maximum contribution limit.