Health Savings Account

Health Savings Account Summary Plan Document

In order to view your spouse and/or over age 18 children’s claims details on the HealthEquity website and mobile app, you are required by HealthEquity to complete a HIPAA form. After the form is on file with HealthEquity, all claims details will populate in your account. If you have any questions regarding their policy, please contact HealthEquity at 866-346-5800.

Claim authorization presentation
*Depending on the state in which you live, the IRS requires the claim authorization every 24 -48 months

Health Savings Account Details

Employees who enroll in the PPO Savings Plan will have a Health Savings Account (HSA) automatically opened on their behalf with HealthEquity. PPO Savings Plan members will need to ensure that they meet the HSA eligibility requirements, outlined below, before enrolling in this type of plan.

Funds to this account are contributed on a tax-free basis and can be used for eligible expenses. Unlike the Health Care Flexible Spending Account (FSA), the funds in the HSA rollover from year-to-year and are the employee's to use, even if leaving University employment. See HSA flyer for more information.

Penn State contributes "seed" money each employee's account at the beginning of the plan year after their first payroll, or after enrollment in the plan based on another type of qualifying life event.

New employees or newly enrolled employees, who have a spouse who has already received Penn State seed "family" funding for the current plan year, are not eligible for additional seed funding. Any HSA seed funding contributed beyond the family maximum must be returned to the University.

Any employee who is newly electing benefits after a divorce will be eligible for "single" HSA seed funding if "family" seed funding has already been distributed for the year.

For 2023, the seed money is as follows:

2023 Health Savings Accounts Seed Money
Salary Coverage Penn State Contribution
$45,000 or less Individual $800
Family $1,600
$45,001 - $60,000 Individual $600
Family $1,200
$60,001 - $90,000 Individual $400
Family $800
More than $90,000 Individual $200
Family $400

If a new enrollee's HSA is not established by December 15 of any given tax year, and that person is eligible for the Penn State contribution, they will receive that year's employer contribution in the following calendar year, provided the account is fully established with HealthEquity.

Features of HSAs:

  • Account holders may contribute to an HSA on a pre-tax basis with payroll deductions.
  • Account holders may contribute to an HSA on a post-tax basis by contacting HealthEquity at 866-346-5800.
  • Both the account holder and the employer may contribute to an HSA.
  • Funds in the HSA can be withdrawn tax-free to pay for eligible expenses.
  • Account holders must have money in their HSA before it is available for use.
  • The balance rolls over from year to year and grows tax-free with interest, allowing account holders to build savings over time.
  • Account holders decide how much to contribute to their HSA, up to the annual IRS maximums, and may change their contributions anytime during the plan year.
  • HSA funds may be used today as needed, or may be left in the account to grow future savings.
  • The account holder may keep funds in the event that they switch health plans during the annual Open Enrollment period.
  • An account holder who has left the University, or has retired, may keep their funds; their HSA will be changed to an individual account remaining with HealthEquity. Contact HealthEquity directly regarding this process.

HSA Welcome Kit and Debit Card

New hires and current employees who elect enrollment in the PPO Savings Plan, will receive an HSA Welcome Kit, including a debit card, from HealthEquity. 

The debit card may be used to pay for eligible claims. While HSA members do not have to substantiate purchases made with their HSA debit card, it is recommended that they keep all receipts in the event of an IRS audit.

With the HealthEquity HSA, all banking regulations apply and no funds will be deposited until the account is established. There is a monthly account maintenance fee of $1.00, which will be automatically deducted from the account. When you are no longer an active University employee, the monthly account maintenance fee increases to $3.95.

For a schedule of account fees, contribution limits, interest rates, and year-end tax form information, please contact the HSA plan administrator.

  • HSA plan prior to 10/05/2017: Contact the number on the back of your current HSA debit card or the Individual HSA number for account at 866-730-8591.
  • HSA plan 10/06/2017 and after: Contact HealthEquity at 866-346-5800. 

HSA Contribution Maximums

2023 HSA Contribution Limits
Coverage Limit
Single $3,850
Family $7,750

When making contributions to the HSA via payroll deductions, remember to factor the Penn State seed money into the annual maximum contribution amount.

Individuals who will be age 55 or older, and who are not enrolled in Medicare, have the ability to contribute an additional $1,000 in "catch-up" contributions to an HSA.

If the employee covers a spouse who will be age 55 or older in the current plan year, and the spouse is not enrolled in Medicare, the employee may open an HSA on their spouse's behalf through another qualified financial institution and deposit an additional $1,000. This additional amount will not be a payroll deduction and therefore should be arranged directly through the financial institution of choice.

Investment Options

One of the key benefits of the Health Savings Account is the ability to invest the funds to help maximize your asset and long term savings potential, tax free. Once your account reaches a balance of $1,000, you have the option to invest your HSA funds above that $1,000 balance. For more information on your investment options, fees, and more visit the HealthEquity's website.

If you are retiring at the age of 65 ½ or older

If you are currently enrolled in the PPO Savings plan with the Health Savings Account, plan to retire within the next year, and are age 65 ½ or older, please read and take action as needed regarding a conflict between IRS regulations and Medicare requirements.

An explanation of the issue and the solution is outlined below:

The issue: Anyone age 65 ½ or older who is enrolled in a qualified high-deductible health plan (PPO Savings plan) with a Health Savings Account (HSA), who retires and enrolls in Medicare Part A, will experience a Medicare-required “look-back period” of 6 months. That “look-back period” overlaps with the timeframe during which you may have had either or both employer and employee contributions made to your HSA. IRS regulations state that an individual cannot receive or contribute to a HSA if covered by Medicare or any other health care insurance. If the individual were to be audited by the IRS, taxes and penalties could apply to the amount contributed to the HSA.

The proposed solution: In order to avoid potential tax issues, you want to STOP YOUR HSA CONTRIBUTIONS so that you have 6 months of NO contributions before you FILE FOR MEDICARE. For example, if you are retiring as of December 31 of any given year, you need to stop your contributions beginning with the June payroll of that same year. In order to move into the University-sponsored Medicare plan after you retire, you must first enroll in Medicare parts A and B. Therefore, you must “file” for Medicare during the month of your retirement, which is December in this example. Social Security uses the filing date in December as part of the look-back period, which means you need to have NO HSA contributions from June – November.

Please log into Workday through the Worklion portal to stop, start, or change your HSA contributions. Any questions relating to Medicare guidelines, please contact your local Social Security office or your tax advisor.

Eligibility Requirements for the PPO Savings Plan with the Health Savings Account (HSA)

All full-time, benefits-eligible employees are eligible, however, the EMPLOYEE:

  • CANNOT be enrolled in Medicare or be collecting Social Security benefits. It is recommended that employees who are returning from retirement consult with their financial advisor regarding implications of dis-enrolling from Medicare in order to be eligible for the HSA, as they will not be able to collect Social Security benefits unless they are enrolled in Medicare. Once an individual dis-enrolls from Medicare, that person is able to contribute to the HSA. 
  • CANNOT be enrolled in another health plan.
  • CANNOT have a balance in a HEALTH CARE Flexible Spending Account, nor have a spouse with a balance in a HEALTH CARE Flexible Spending Account.
  • CANNOT have a J1 Visa - J1 Visa holders are eligible for the PPO plan only.

Due to IRS regulations governing HSA plans, PPO Savings Plan members are not eligible to enroll in the Health Care Flexible Spending Account (FSA). If an employee currently has money in a Health Care FSA—either through themselves or through a spouse who has elected the PPO Savings Plan—that person must use all of the money in the account before enrolling in the PPO Savings Plan.

If two Penn State employees are married and have elected FAMILY coverage under the PPO Savings Plan with an HSA, a Health Care Flexible Spending Account (FSA) cannot be opened under either employee's name. In addition, if you are the Penn State employee and your spouse is employed elsewhere and enrolled in a high-deductible health plan with an HSA, a Health Care Flexible Spending Account cannot be opened by either employee. Two members married and filing a combined tax return cannot have both an FSA and HSA in the same plan year, regardless of their personal health plan elections. However, the Dependent Care FSA is available to either employee up to the IRS limits. 

Paying for Medical Expenses with the HSA

Qualified medical expenses are those incurred by the following individuals:

  • Employee and spouse
  • Dependents who are claimed on the account holder's tax return
  • Any person claimed as a dependent on the account holder's tax return except if:
    • the person filed a joint tax return
    • the person had a gross income of $3,900 or more
    • the account holder, or the account holder's spouse if filling jointly, could be claimed as a dependent on someone else's tax return

Call HealthEquity, or visit their IRS information, to learn more about tax dependent versus non-tax dependent claim eligibility under your HSA.

Changing The HSA Contribution

Contribution amount changes may be made on a per pay basis through Workday. Changes will become effective on the next available payroll.

Employees are responsible for ensuring that the annual maximum IRS contribution limit is not exceeded. Penn State is not responsible for tax consequences as a result of the employee contributing beyond the annual IRS contribution limit. The Penn State contribution is included in the annual IRS contribution limit.