Health Savings Account

Important Update: 2017 Health Savings Account Change to HealthEquity

After the transition on October 6, 2017, please note that none of your Highmark claims for 2017, or prior, will transfer to HealthEquity. Therefore, you will have three options for submitting claims to your HSA.

  1. Once you receive an invoice from your provider, use your HSA debit card from HealthEquity to pay the claim.
  2. Once you receive an invoice from your provider, you can pay for services out-of-pocket, and then you will have the ability to “build” your claim within your HealthEquity account and pay yourself back from your HSA. In order to use this option, you will need to ensure that you have established your online account with HealthEquity at https://my.healthequity.com/.
  3. Once you receive an invoice from your provider, you can “build” your claim within your HealthEquity account using the provider address from the invoice, and pay the provider directly. In order to use this option, you will need to ensure that you have established your online account with HealthEquity at https://my.healthequity.com/.

As of January 1, 2018, there will be an automatic claims feed with HealthEquity for Aetna, CVS Caremark, Highmark Vision and United Concordia Dental. This will enable you to pay balances for those claims directly to the provider through the HealthEquity portal, or to yourself if you have paid out-of-pocket, without the need to enter claim details.

For answers to some common HSA questions, please see HSA Frequently Asked Questions.

For all of your HealthEquity questions, please contact member service at (866) 346-5800. Their representatives are ready and available to assist with all of you HSA questions. You can also access your online account at https://my.healthequity.com/.

This information was previously released on August 31, 2017, to existing Health Savings Account participating employees to inform you about an exciting change Penn State is making to the administration of Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) effective January 1, 2018.

In order to make this transition as smooth as possible, the administration of existing  HSAs for active employees and non-Medicare retirees who are currently enrolled in the PPO Savings Plan, has been transferred to HealthEquity as of September 8, 2017, at no cost to you. As of October 6, 2017, the transition has been completed and you should use your new HealthEquity HSA going forward.

  • This change brings several enhancements, including:
  • online access to a member portal
  • year-round education
  • a wide range of investment options
  • member service specialists who are available 24/7 to answer your questions
  • monthly administrative fee of $1.75, which is a 42% reduction, beginning in October 2017

Health Savings Account

Penn State employees who enroll in the PPO Savings Plan will automatically have a HealthEquity Health Savings Account (HSA) created on their behalf.

The HSA, administered by HealthEquity, may be used to pay for qualified medical expenses.

Employees looking to learn more details about Health Savings Accounts, can do so by visisting HealthEquity. For employees currently participating in the HSA, you can manage your account by visiting My HealthEquity.

Features of HSAs:

  • Account holders may contribute to an HSA on a pre-tax basis with payroll deductions
  • Both the account holder and the employer may contribute to an HSA
  • Funds in the HSA can be withdrawn tax-free to pay for qualified medical expenses
  • 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 at 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 the funds in the event he/she retires from or leaves Penn State, or switches health plans at Open Enrollment each year

Understanding Health Savings Accounts

Under the PPO Savings plan, both the account holder and the employer may make contributions to the account. For the 2017 plan year, Penn State will contribute based on the following chart.  Account holders are not required to make contributions to the account.

2017 Penn State Contribution for Faculty & Staff 2017 Penn State Contribution for Teamsters

Salary over $60,000
$400: Individual
$800: All other coverage levels

Salary $60,000 and under
$600: Individual
$1,200: All other coverage levels

All salary levels
$400: Individual
$800: All other coverage levels

If an employee's HSA is not established December 15 of any given year and that person is eligible for the Penn State contribution, he/she will receive the contribution in the following calendar/tax year, provided that the  HSA is established at that time.

Account holders must have the money in their HSA before it is available for use.

For example, if an individual has used all of the available funds in his/her account and that person then receives a medical bill for $80, he/she cannot pay the claim from of the HSA until there are sufficient funds in the account to cover the bill. 

Account holders will be issued a debit card which may be used to pay for medical 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. 

HealthEquity charges a monthly account maintenance fee of $1.75, which will be automatically deducted from the account.

Account holders may transfer the monies deposited into their Penn State HSA to the HSA of their choice. For more information on how to transfer to or from your HealthEquity HSA, please contact HealthEquity at (866) 346-5800.

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
  • CANNOT have a J1 Visa - J1 Visa holders are eligible for the PPO Blue 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. An FSA that has had a contribution added within 90 days of opening is considered an active account.

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. The IRS does not permit use of a health care FSA when enrolled in an HSA. The Dependent Care FSA is available to either employee up to the IRS limits, however.

Making Contributions to a Health Savings Account

As part of the enrollment in a PPO Savings Plan, an HSA will be automatically opened on the employee's behalf and Penn State will make a contribution to the account that is available to use right away for eligible health care expenses.

For the 2017 plan year, Penn State will contribute to the HSA of employees who have elected coverage under the PPO Savings plan in accordance with the below chart.

The maximum annual Penn State HSA contribution per family is the amount in the chart below combined for each spouse employed by Penn State. If an employee elects Family coverage under the PPO Savings Plan and has received the maximum contribution towards his/her HSA during the calendar year, that person's family is not eligible for any additional Penn State contribution in the event his/her spouse becomes an employee of the University during the same calendar year.

2017 Penn State Contribution for Faculty & Staff 2017 Penn State Contribution for Teamsters

Salary over $60,000
$400: Individual
$800: All other coverage levels

Salary $60,000 and under
$600: Individual
$1,200: All other coverage levels

All salary levels
$400: Individual
$800: All other coverage levels

In addition, employees who are enrolled in the PPO Savings Plan may make a separate election to contribute funds to the account through payroll deduction. When enrolling in the PPO Savings Plan, the employee will be asked to amount of the per paycheck contribution that they would like to make to the HSA. 

For 2017, the maximum HSA contribution as per the IRS is $3,400 for Individual coverage and $6,750 for Family coverage. The maximum contribution includes both Penn State’s contribution and the employee's own election. Account holders are not required to make contributions to the account.

If an employee's HSA is not established by December 15 of any given year, and that person is eligible for the Penn State contribution, he/she will receive the contribution in the following calendar/tax year, provided that the HSA is established at that time.

HSA account contributions made by employees through payroll deduction will be available for use within 5 business days of the actual pay date. For example, if the pay date is a Friday, the HSA funds will be in the account by the following Friday.

Employee are able to contribute post-tax money into their HSA. For more details on this process, you will need to contact HealthEquity at (866) 346-5800.

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 eligiblity under your HSA.

Changing The HSA Contribution

Contribution amount changes may be made on a monthly basis by completing a 2017 Health Savings Account (HSA) Contribution Election Agreement. 

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.

In 2017, employees cannot contribute on a pre-tax deduction basis more than amounts indicated in the following chart based on enrollment in Individual coverage or Family coverage and their salary amount. Any HSA contributions made directly to HealthEquity also must be taken into consideration when determining whether the annual contribution limit has been exceeded.

2017 HSA Contribution Limits
Single Coverage * Salary $60,000 and less Salary over $60,000
Penn State Contribution $600 $400
Maximum Employee Contribution $2,800 $3,000
Total $3,400 $3,400
Family Coverage * Salary $60,000 and less Salary over $60,000
Penn State Contribution $1,200 $800
Maximum Employee Contribution $5,550 $5,950
Total $6,750 $6,750

* Please note - Teamsters Penn State contributions are $400 and $800, regardless of salary due to the collective bargaining agreement.

Individuals who will be age 55 or older and who are not enrolled in Medicare have the ability to contribute up to an additional $1,000 in “catch-up” contributions to an HSA. These individuals will have a maximum contribution of $4,400 for Individual coverage and $7,750 for Family coverage. This is NOT a payroll-deducted contribution; you will need to contact HealthEquity regarding this additional contribution.

If the employee covers a spouse who will be 55 or older in 2017 and who is not covered by Medicare, the employee may open a Health Savings Account on their behalf through another qualified financial institution and deposit an additional $1,000. This additional amount will not be payroll-deducted and therefore should be arranged directly through the financial institution of choice.

Employees who Switch Health Plans, Leave Penn State or Retire

Employees who change health plans, leave, or retire from Penn State will not experience any changes to the management of their HSA. At the termination of the employee's Penn State medical coverage, the HSA becomes a "stand alone" HSA, or individual account, with HealthEquity. Notificiation regarding the change to a stand-alone account will be mailed by HealthEquity to the home address on file. Account holders with stand-alone HSAs will have the following:

  • Keep the same account number
  • Be able to manage their account through the HealthEquity website
  • Have access to HealthEquity customer service at (866) 346-5800

Employees who leave the University and wish to transfer your HSA funds from HealthEquity to another HSA account should contact HealthEquity directly for assistance.

Employees who have an HSA from another employer or institution may move their funds INTO the HealthEquity HSA by completing this form.

HSA Fees, Limits, Rates, and Taxes

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

  • Information for HSA plan prior to 10/05/2017: Contact Highmark/Bank of America at (800) 914-4384
  • Information for HSA plan 10/06/2017 and after: Contact HealthEquity at (866) 346-5800