PEBB offers consumer-directed health plans (CDHPs) with health savings accounts (HSAs) to eligible members through Group Health, Kaiser Permanente, and Uniform Medical Plan (UMP).
The plans' HSA trustee is HealthEquity, Inc.
What is a CDHP?
It's a type of insurance plan that has lower premiums, a higher annual deductible, and a higher out-of-pocket maximum 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:
All PEBB CDHPs provide 100 percent coverage for preventive care services with no deductible
(Exception: Preventive care is not covered in Group Health's extended network).
See the medical benefits page for CDHP coverage details.
What is an HSA?
It's a tax-exempt account that you, your employer, or anyone can deposit funds into on your behalf. Any amount that you contribute can be deducted from your taxable income, giving you a tax savings.
You can use the funds in 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.
When you enroll in a PEBB CDHP, you'll also be enrolled in an HSA.
You must meet certain eligibility requirements to enroll in a CDHP/HSA. HSA funds are held in the subscriber's name. If you (the subscriber) are not eligible for a CDHP/HSA and enroll, you may be liable for tax penalties.
If you have CDHP/HSA eligibility questions, call HealthEquity toll-free at 1-877-873-8823 or consult your tax adviser.
Your employer (or PEBB) deposits money into your HSA
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)
The entire amount is not available on January 1.
*If you have at least one other family member on your CDHP, then you qualify for the family contribution.
You can contribute to your HSA tax-free
You may be able to have money deducted from your paycheck pre-tax and deposited into your HSA. Check with your employer to see if this option is available to you. If yes, 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 in 2014.
The IRS has annual limits for contributions from all sources into an HSA. For 2014 the limit is $3,300 for single subscribers, $6,550 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.)
If I'm enrolled in a CDHP/HSA, what happens if I later want to switch to a different (non-CDHP) plan?
- Any unspent funds in your HSA will remain. 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 HealthEquity, you should contact them to stop the deductions from your paycheck.