What you need to know
Just like the name suggests, a Health Savings Account (HSA) is a savings account that lets you save tax-free dollars to use for health care expenses. It’s available to those who enroll in the UnitedHealthcare Consumer Directed Heath Plan (CDHP).
Once you enroll in the CDHP, you’ll receive a welcome kit from HealthEquity with your debit card and information about your HSA.
What makes the HSA so great?
Use your HSA money to pay for qualified medical expenses, including deductibles and copays—or keep it for future expenses, even those you incur in retirement. Look at all the ways you win with an HSA:
- Your contributions to the HSA are tax-free. You can select a contribution amount when you enroll, and contributions are taken from your paycheck pre-tax.
- PayPal also contributes FREE money—$500 annually for employee-only coverage and $1,000 annually if you cover dependents. (The company’s contribution is included in the first paycheck after you enroll in the plan.)
- The maximum total annual contribution (yours and PayPal's) to your HSA is $3,500 for employee-only coverage and $7,000 if you cover dependents. You can contribute an additional $1,000 if you are age 55 or older.
- You earn tax-free interest on investment returns on your HSA balance.
- Any money in your HSA that you don't spend stays in your account to help you save for future medical and retiree health care expenses.
- Your HSA belongs to you—always. You take it with you if you leave the company or retire.
What can I use my HSA money for?
The IRS determines what expenses can and cannot be reimbursed. Here are just a few examples of qualified medical expenses you can use your HSA money for:
- Dental treatment
- Diagnostic tests and devices
- Doctors’ visits
- Eyeglasses, contact lenses, and exams
- Hearing aids and batteries
- Smoking cessation
If you enroll in the CDHP with HSA, the Health Care FSA becomes a "limited-purpose" FSA that you can use to reimburse yourself for eligible dental and visions expenses.
HSA vs. Health Care FSA
|Health Savings Account (HSA)
|Health Care FSA
Your Spending Account™(YSA)
|What if I have BOTH types of accounts?||No impact on HSA||FSA-eligible expenses are limited to dental and vision only|
|Who contributes?||You and PayPal||You|
|2019 maximum total annual contribution||$3,500 (employee-only coverage)
$7,000 (employee + covered dependents)
|Can the account grow?||Yes, through tax-free interest and investment earnings.||No|
|Is the money taxable when used?||Not if it’s used for eligible expenses.||No, but it can only be used for eligible expenses.|
|Do I lose unspent money at the end of the year?||No, you own it and keep it.||Up to $500 of your 2019 year-end Health Care FSA balance will automatically be added to your 2020 plan year balance. There is no carryover feature for the Dependent Care FSA.|
|Do I have to enroll each year?||Your HSA remains active as long as you are in the CDHP, and the company contribution continues year to year.
If you contribute to the HSA, your election returns to zero at the end of each calendar year. You may elect to contribute (or change the amount) anytime during the year.
If you leave PayPal or retire, your HSA is no longer active for you to contribute. But the money is still yours to spend on eligible medical expenses.
|Yes, if you want to participate for the following year.|
|Can I change my contribution rate during the year?||Yes, at any time.||No, only at Annual Enrollment or within 31 days of a qualifying change-in-status event.|
|Can I take the account balance with me when I leave PayPal?||Yes, the money in the account is yours to use anytime in the future, even if you leave PayPal or retire.||No|