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There are a number of ways to control our health care expenses. In addition to making better lifestyle choices, consider a consumer-driven health plan (CDHP) and its companion, the health savings account (HSA). In order to have an HSA, you must have a CDHP.
An HSA, which is a special, tax-qualified consumer bank account, allows you to set aside money to pay for qualified health-related costs. You can direct money to the account and, a bonus of state employees, if you are covered by one of the state’s CDHP/HSAs, the state will prefund the account and make biweekly payments throughout the calendar year. Regardless who makes deposits into the account, all funds in your HSA belong to you, the employee. Even if you leave state employment. The money goes with you and it’s tax-free. Unlike the flexible spending account, money in an HSA accumulates. There is no use-it-or-lose-it consequence. The money can roll over year after year.
With an HSA, you can decide how much to contribute to the account, whether to pay for current medical expenses from it or save for the money for future use. Once the balance reaches $1,000, it begins to earn interest.
For 2012, the maximum that can be contributed to an HSA is $3,100 for single coverage and $6,250 for family coverage. This includes contributions made by the employee and the state. For individuals 55 years of age and older, an additional $1,000 can be contributed to the account.
|HSA Account||Coverage||Initial Contribution*||Bi-Weekly Contribution||Monthly Contribution||Maximum Annual ER Contribution|
|HSA 1 w/CDHP 1||Single
|HSA 2 w/CDHP 2||Single
*Initial contribution as listed above apply to employees with a CDHP effective between 1/1/12 thru 6/1/12 and with an open HSA. CDHPs effective after 6/1/12 but before 12/1/12 and with an open HSA, will receive 1/2 of the initial contribution.
Employees participating in CDHPs are reminded that they must open an HSA in order to receive the state's HSA contribution or the bank will charge a set-up fee.
Tower Bank provides the HSA program for the state of Indiana. In order to have the state deposit money into an employee’s HSA, the employee must first open their HSA with Tower Bank.