HEALTH SAVINGS ACCOUNTS 2020

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A tax-free┬╣, individually owned savings account you use to pay for qualified medical expenses.

OPEN ENROLLMENT SPOTLIGHT

HSA CHANGES FOR 2020

Limit Increases

  • Individual Coverage:  $3,550
  • Family Limit:  $7,100

Note:  If you did not make an election for 2020, you may do so at any time.  Please contact the benefits office.

If you are turning age 65 in 2020, you will need to stop your deductions within 6 months of applying for Medicare Part A.


HSA SPOTLIGHT

YEAR END TAX FILING

TAX FILING - WHAT YOU NEED TO KNOW

    • In January, Fidelity will mail form 1099SA to all Health Savings Account (HSA) participants showing the total amount of HSA funds were spent in calendar year 2019. This amount shows on line one of the form as Gross Distributions.
    • Box 12W on your 2019 W-2 form will show the total amount of funds that were contributed into your Health Savings Account in 2019. This amount includes both the employer and the employee contribution.
    • When filing your taxes, you will need to complete IRS form 8889, using information found on form 1099SA and Box 12W of your 2019 W-2.
    • Be sure to keep copies of all receipts that support the amount shown in box 1 of 1099SA, in case you are ever audited.
    • Always consult a tax professional when you have questions about HSA tax filing and/or eligibility.

Health Savings Accounts 101

Want to learn more? click here

Eligibility

  • All benefits-eligible Faculty, Exempt, Non-Exempt, SEIU and RAB employees who elect the High Deductible Health Plan and who are:
    • NOT a Research Fellow or a J-VISA holder.
    • NOT enrolled in Medicare, Medicaid or any other type health insurance that is not a qualified HDHP.
    • NOT a patient of Dartmouth Health Connect.
    • NOT being claimed as a dependent on another person's tax return.
    • NOT eligible to receive medical-expense reimbursement under a general-purpose Health Care FSA of a spouse or a parent.

Dependents

While the Affordable Care Act (ACA) allows parents to add their adult children who have not reached age 26 to their health plans, the tax laws regarding HSAs have not changed and children ages 19 until age 26 must be considered a tax dependent in order for an adult child's medical expenses to qualify for payment from a parent's HSA. According to the Internal Revenue Service (IRS) definition, a dependent is a qualifying child (daughter, son, stepchild, sibling or step sibling, or any descendant of these) who meet these three criteria:

  • Has the same principal place of abode as the covered employee for more than one-half of the taxable year, and
  • Has not provided more than one-half of his or her own support during the taxable year, and
  • Is not yet 19 (or, if a student, not yet 24) at the end of the tax year, or is permanently and totally disabled.

One way around this is for an adult child to set up their own HSA. As long as they are covered on the family qualified HDHP, adult children can contribute the full family HSA amount into their HSA account. The dependent's contributions will not reduce the amount their parents can deposit into their accounts.

Key benefits of an HSA

  • The HSA provides a triple tax advantage: money goes in tax-free, grows tax-free, and is tax-free when used to pay for eligible medical expenses
  • You can increase or decrease your annual contribution amount any time during the plan year.
  • You have the option of using a Fidelity provided debit card, checkbook, or you may submit claims manually.
  • When you use the account, your HSA dollars will count toward your annual deductible and out-of-pocket maximums.
  • The money is always yours. Besides being free to choose when and how much of your HSA funds to use, any money left over at year's end is yours to keep.  You can even take your HSA dollars with you when you leave the plan, change jobs or retire.
  • Administration is easy with no stressful submission or substantiation deadlines.
  • The Dartmouth contribution to your HSA account is front loaded and can be used once your account has been activated. Your contribution is eligible for withdrawal as soon as it is contributed.

Other Considerations

  • Payments are not automatic. You decide when and how to use the money in your HSA account. Spend it during the year, save it for the future or open an investment account.
  • Consider consulting a tax professional when contributing to a Health Savings Account.
  • If you will be Medicare eligible in 2020, please see the HSA & Medicare enrollment section of our website.
┬╣ HSA contributions and earnings are not subject to federal taxes and not subject to state taxes in most states. A few states do not allow pre-tax treatment of contributions and earnings. Contact your tax advisor for details on your specific location.

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Plan Summary

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How your HSA Plan Works

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