PEBB offers consumer-directed health plans (CDHPs) with health savings accounts (HSAs) to eligible Group Health, Kaiser Permanente, and Uniform Medical Plan (UMP) members. The plans' HSA trustee is HealthEquity, Inc.
You must meet certain eligibility requirements to enroll in a CDHP/HSA. If you (the subscriber) are not eligible for a CDHP/HSA and enroll, you may be liable for tax penalties.
For CDHP/HSA eligibility questions, call HealthEquity toll-free at 1-877-873-8823 or consult your tax advisor.
What is a CDHP?
CDHPs offer lower premiums, a higher medical deductible, and a higher medical out-of-pocket limit than most traditional health plans.
Other differences include:
- You have to meet the annual deductible before the CDHP begins paying benefits. This includes prescription drug costs.
- If you cover at least one other family member, then:
- You have to meet the family deductible before the CDHP begins paying benefits.
You have to meet the family out-of-pocket maximum before the CDHP will pay 100 percent for covered benefits.
Note: In 2016, the CDHP will pay 100 percent for covered benefits for individual family members who meet certain out-of-pocket limits, even if the family out-of-pocket limit has not been reached.
All PEBB CDHPs provide 100 percent coverage for preventive care services with no deductible.
See the medical benefits page for CDHP coverage details.
What is an HSA?
It's a tax-exempt account anyone can deposit funds into on your behalf. You can deduct any amount you contribute from your taxable income, giving you a tax savings.
You can use your HSA to pay for IRS qualified out-of-pocket medical expenses (like deductibles, copays, and coinsurance), including services that may not be covered by your health plan. You can spend HSA funds on qualified expenses for your spouse or other tax dependents, even if they aren't covered on your plan.
Note: Enrolling in a PEBB CDHP automatically enrolls you in an HSA.
Employer (or PEBB) HSA contributions
When you enroll in a PEBB CDHP, your employer contributes $700.08 for you, or $1,400.04 for your family* in your HSA. If you're a non-Medicare retiree, COBRA or Leave Without Pay member, PEBB contributes the same amount.
The contribution goes into your HSA in monthly installments over the year:
||x 12 (months)
|You and your family*
||x 12 (months)
*If you have at least one other family member on your CDHP, then you qualify for the family contribution.
Note: The entire amount is not available on January 1.
Tax-free HSA contributions
Ask your employer if you can have money deducted from your paycheck pre-tax and deposited into your HSA. If you can, fill out an Authorization for Payroll Deduction form and give it to your payroll office.
You can also make post-tax contributions from your bank account and deduct the amount from your taxable income when you prepare your tax return. You'll get a statement from HealthEquity to help you prepare your tax return.
The IRS has annual limits for contributions from all sources into an HSA. For 2015, the limit is $3,350 for single subscribers, $6,650 for families. For 2016, the limit is $3,350 for single subscribers, $6,750 for families.
Members age 55 and up can contribute up to $1,000 more per year. You must turn age 55 by the end of the taxable year--generally April 15 of the following year--to qualify.
It is your responsibility not to exceed the maximum annual contributions allowed under IRS rules. Before you make your own contributions, first count the annual contribution of your employer or the PEBB Program (including any SmartHealth incentive, if applicable). If contributions from all sources exceed the maximum amount allowed, you may be subject to IRS penalties and/or fees from HealthEquity.
What happens if I switch from a CDHP/HSA to a non-CDHP plan?
- You won't forfeit any unspent funds in your HSA. You can spend your HSA funds on qualified medical expenses, or you can leave them for the future. However, you and your employer (or the PEBB Program) may no longer contribute to your HSA.
- HealthEquity will charge you a monthly fee of $3.95 if you have less than $2,500 in your account after you leave the CDHP. You can avoid this charge by either ensuring you have at least $2,500 in your HSA or spending all of your HSA funds.
- If you set up automatic contributions to your HSA either through your employer’s payroll office or to HealthEquity, you must contact them to stop the deductions from your paycheck.