Health Savings Account (HSA)

Health Savings Account (HSA)

If you’re enrolled in USD’s CDHP plan through Cigna, you may be eligible to participate in the Health Savings Account (HSA). The HSA allows you to use pre-tax dollars to pay for many of your qualified out-of-pocket healthcare expenses for you and your eligible dependents. USD also contributes to your HSA on your behalf.

Eligible health care expenses for you and any eligible dependents include deductibles, prescriptions, dental care, eyeglasses, and other out-of-pocket costs.

Click here to see a complete list of qualified health care expenses.

Four Reasons to Take Advantage of the CDHP with HSA:

1. The HSA is yours. If you leave USD, your account goes with you.
2. HSA funds never expire, and accrued funds can be taken with you into retirement. Once you reach age 65, you can use HSA funds to pay for non-health care expenses, too! You typically pay ordinary income tax on any non-health care purchases once you reach age 65.
3. HSAs have a triple tax advantage, meaning your salary dollars go further.
4. USD contributes to your HSA.

How Are Contributions Made to HSAs?

Once you open your HSA, contributions come from two sources—you and USD. The table below shows the maximum that can be contributed to your HSA in 2024.

Are HSAs Really Tax-free?

Yes! HSAs give you a triple tax advantage:

1. Your contributions to the HSA are not taxed.
2. Payments for eligible expenses are tax-free.
3. Earnings are tax-free.*

Questions? Refer to IRS Publication 969 for complete HSA rules.

^*State taxes may still apply in CA and NJ. For detailed tax implications of HSAs, please contact your professional tax advisor.

HSA Rules and Considerations

• You cannot be covered under another non-high deductible health care plan, including your spouse’s Health Care FSA.
• You cannot be enrolled in any part of Medicare (A, B, or D) or Tricare.
• You cannot be claimed as a dependent on someone else’s tax return.
• If you are electing the CDHP/HSA plan for the first time and you have a balance in a Health Care FSA on December 31, 2024, it must be rolled over to a Limited Purpose FSA by January 1, 2025.