Health savings accounts (HSAs) (non-Medicare)

What is a health savings account (HSA)?

An HSA is a tax-advantaged account, which means money you contribute is not taxed. When you enroll in a CDHP, you are automatically enrolled in an HSA. The PEBB Program also contributes to your HSA each month.

With an HSA you can pay for:

• IRS qualified out-of-pocket medical expenses (like deductibles, copays, and coinsurance) including some expenses and services that your health plans may not cover.
• Qualified expenses for your spouse or other tax dependents, even if they aren't covered on your medical, dental, and vision plans.

Your HSA balance can grow over the years, earn interest, and build savings that you can use to pay for health care as needed. The money is yours, even if you change health plans.

After you’re 65, you can withdraw HSA dollars for any expense – you’ll just need to pay income taxes.

What is a consumer-directed health plan (CDHP)?

A CDHP is a high-deductible health plan (HDHP), with a health savings account (HSA). CDHPs offer lower premiums, a higher medical deductible, and a higher medical out-of-pocket limit than most traditional health plans.

Kaiser Permanente NW, Kaiser Permanente WA, and Uniform Medical Plan offer CDHPs. Visit benefits and coverage by plan for coverage details.

Other features

• If you cover yourself and one or more dependents, you must pay the entire family medical deductible before the plan begins paying benefits.
• Your medical and prescription drug costs count toward the annual deductible and out-of-pocket maximum.

Contributions

Call HealthEquity to set up direct deposits to your HSA. You may be able to deduct your HSA contributions from your federal income taxes.

To make sure you do not go beyond the limit, consider the PEBB Program's contributions, your contributions, and the SmartHealth wellness incentive in January (if you qualify). Use the HSA contribution calculator.

Your contributions

The IRS has annual limits for contributions from all sources into an HSA.

• For 2026, the contribution limit for an HSA is $4,400 (subscriber only), and $8,750 (subscriber and one or more dependents).
• For 2025, the contribution limit for an HSA is $4,330 (subscriber only) and $8,550 (subscriber and one or more dependents).
• Members ages 55 or older, you may contribute up to $1,000 more annually in addition to these limits.

Employer contributions

After your HSA is established with HealthEquity, you can start to receive employer contributions.

The contribution goes into your HSA in monthly installments over the year on the last day of each month (the entire HSA amount is not available on January 1).

The Health Care Authority will contribute the following amounts to your HSA:

Just you

• Monthly: $58.34
• Total deposited by the end of the year: $700.08

You and your family

(If you have at least one other family member on your CDHP, you qualify for the family contribution.)

• Monthly: $116.67
• Total deposited by the end of the year: $1,400.04

You will get an additional $125 in your HSA (deposited at the end of January in the following calendar year) if you qualify for the SmartHealth wellness incentive.

Eligibility

You must meet certain eligibility requirements to enroll in a CDHP with an HSA. If you (the subscriber) are not eligible and enroll, you may be liable for tax penalties.

To be eligible to enroll in a CDHP, you cannot be enrolled in:

• Medicare Part A or Part B
• Medicaid.
• Another health plan that is not an IRS-qualified high-deductible health plan — for example, on a spouse’s or state-registered domestic partner’s plan — unless the health plan coverage is limited coverage, such as dental, vision, or disability coverage.
• A Voluntary Employee Beneficiary Association Medical Expense Plan (VEBA MEP), unless you convert it to a limited health reimbursement account (HRA) coverage. (This includes you or your spouse or state-registered domestic partner.)
• A CHAMPVA plan.
• A TRICARE plan.
• A fully claims-eligible health reimbursement arrangement (HRA), such as a Voluntary Employees' Beneficiary Association (VEBA) plan. However, you may enroll in a CDHP if you convert your HRA to "limited HRA" coverage by submitting a Limited HRA Coverage Election form to your VEBA plan.
• A Flexible Spending Arrangement (FSA). This also applies if your spouse has an FSA, even if you are not covering your spouse on your CDHP. This does not apply if the FSA is a limited purpose account or a post deductible FSA.
• You also cannot be claimed as a dependent on someone else’s tax return.

Other exclusions apply. Check IRS Publication 969—Health Savings Accounts and Other Tax-Favored Health Plans, contact your tax advisor, or call HealthEquity toll-free at 1-877-873-8823(for Kaiser members) or 1-844-351-6853 (for UMP members) to verify whether you qualify. See The Complete HSA Guidebook for full details.

What happens to my HSA when I leave the CDHP?

If you choose a medical plan that is not a CDHP you should know:

• You won’t forfeit any unspent funds in your HSA after enrolling in a different plan. You can spend your HSA funds on qualified medical expenses in the future. However, you and the PEBB Program can no longer contribute to your HSA.
• HealthEquity will charge you a monthly fee if you have less than $2,500 in your HSA after December 31. You can avoid this charge by either ensuring you have at least $2,500 in your HSA or by spending all of your HSA funds by December 31. Other fees may apply. Contact HealthEquity for details.
• If you set up automatic contributions to your HSA through HealthEquity, you must contact them to stop the deductions.