Officers - Health Savings Account

Health Savings Accounts

A Health Savings Account (HSA) is a pre-tax savings account paired with the University's High Deductible Health Plan (HDHP) to pay for current and future medical expenses for you and your dependents. The HSA is administered by Optum Bank.

Using an HSA

  • Under IRS regulations, if you enroll in an HSA, you cannot participate in a Healthcare FSA (including rollover amounts).
     
  • If your spouse participates in a Healthcare FSA that permits reimbursement of your unreimbursed medical expenses, you will not be eligible to establish or contribute to an HSA until you are no longer covered by your spouse’s Healthcare FSA.

  • You will not be eligible to establish or contribute to an HSA if you are covered by a medical plan option that is not an HSA-qualified HDHP (e.g., a spouse’s employer’s non-HDHP coverage).
     
  • You can contribute to the HSA if you are over age 65, but only if you are not enrolled in any Medicare benefits (including Part A).

Note for Same-Sex Domestic Partners

IRS rules do not allow you to use your HSA to reimburse yourself for the expenses of your same-sex domestic partner or his/her children.

Tips on how to start, build, grow and use a Health Savings Account: 

View HSA infographic

Here’s how you can save using your HSA:

  • Pre-tax contributions. You can elect automatic payroll deductions on a pre-tax basis to fund your account and your election will be deducted in equal installments from each paycheck. You can change your contribution amount at any time. Keep in mind that the total amount of your contributions cannot exceed $3,600* for individual coverage and $7,200* for family coverage. You cannot elect to pre-fund your HSA at the beginning of the year.

     
  • Catch-up contributions. If you are at least age 55 and are not enrolled in Medicare, you can make “catch-up” contributions to your HSA. The maximum catch-up contribution is $1,000*.

Note: If you are considering after-tax HSA contributions, you may want to consult with a tax adviser or financial professional.

*IRS limits are subject to change.

You can choose to pay your bills out of your own pocket or through your HSA. If you choose to pay through your HSA, you can use:

  • Your Optum Bank HSA Debit Mastercard
  • Online Bill Payment Service available on www.myuhc.com

For example, you could use your HSA debit card to pay for prescription drugs at the pharmacy.

Important Note on Access

You cannot access funds in your HSA until you have contributed them. You need to build up your HSA contributions—made through payroll deductions—before taking money out of your HSA for eligible expenses. Your HSA funds will be available as soon as administratively possible after Columbia has sent your payroll deductions to Optum Bank.

Qualified medical expenses that may be paid through your HSA on a tax-free basis include: most medical care and services; dental and vision care; prescription drugs; and premiums paid for COBRA, long-term care and medical and prescription drug expenses as a retiree, including Medicare premiums. You can see a complete list of eligible expenses at www.irs.gov (Publications 969 and 502).

  • Optum Bank, a subsidiary of UnitedHealth Group, is the administrator of the HSA.
     
  • You can reach Optum Bank by calling UHC customer service at 800-791-9361 or at www.optumbank.com.
     
  • If you have an account balance of at least $2,000, you can choose to invest among multiple investment options. Any earnings are automatically reinvested and grow tax-free.

Investing your Health Savings Account (HSA) funds is a way to save for long-term health care needs and financial goals. 

HSAs are triple tax advantaged, making them an effective savings and investment account: 

  1. Payroll contributions to an HSA are tax-advantaged
  2. All interest earnings and investment growth from deposits are income tax-free (in most states)
  3. HSAs can be used income tax-free for qualified medical expenses

If you participate in an HSA through the University, and you have an account balance of at least $2,000, you can invest a portion of your funds with Optum Bank through Betterment, an independent online financial advisor. 

If you participate in an HSA through the University, and you have an account balance of at least $2,000, you can invest a portion of your funds with Optum Bank through Betterment, an independent online financial advisor. 

Betterment offers: 
  • Online financial advice. 
  • Help building a personalized portfolio with risk levels and investment mixes to suit your preferences.
  • Holistic advice across all your accounts, including external accounts. 
  • Tax-coordination between an HSA and other retirement accounts to optimize your retirement savings.

Learn more at Betterment.com/investing

 

If you change health plans, leave Columbia or retire:

  • You do not pay taxes on the money you withdraw to pay for current and/or future qualified healthcare expenses.
     
  • Withdrawals for non-qualified expenses are subject to taxes and an additional 20% penalty if you’re under age 65.
     
  • You should keep careful records of your healthcare expenses and the corresponding withdrawals from your HSA, in case you need to provide proof to the IRS to support your account distributions reported on Form 8889 with your annual IRS tax return.

Your HSA Elections

You can change your HSA elections at any time during the year. The change will always be effective on the first of the following month.

Your Personal Account

The HSA is your personal account, which you can continue to use even if you change health plans, leave Columbia or retire.