Health Savings Account (HSA)

The Health Savings Account (HSA) is a bank account that works with the Health+Savings medical option to help you pay for your health care expenses, including any expenses before you meet your Health+Savings deductible. You, and not BP, own that account.

Administered by PayFlex (now part of Aetna), it works like the Health Care Flexible Spending Account (HCFSA) in that you can use tax-free dollars to cover the cost of eligible health care expenses. But unlike the HCFSA, unused funds at year end are kept by you, BP also may make contributions to the account, and you can invest your HSA money in investment funds to potentially grow your savings (assuming your balance is high enough). The earnings you make on your investment are tax-free. (Note: Federal regulations do not allow you or your spouse to contribute to both an HSA and BP’s HCFSA.)

You can use the money in your HSA to pay for eligible health care expenses, or you can choose to save your funds for the future. You never forfeit your contributions to the HSA. Unused money will carry over from one year to the next, helping you save for future expenses. You can keep any remaining money you have saved in your HSA year after year, even if you leave BP. So you can contribute tax-free, the money can grow tax-free and you can use the balance for eligible expenses tax-free — a triple tax advantage!

Who can contribute to an HSA

You are eligible for an HSA if you are:

  • Covered by a high deductible health plan, such as the Health+Savings Option.
  • Not covered under another health plan (including a plan your spouse/domestic partner may have, unless your spouse’s plan is a high deductible health plan).
  • Not enrolled in a Health Care Flexible Spending Account (including an account your spouse may have with BP or a separate employer).*
  • Not enrolled in Medicare.
  • Not eligible to be claimed as a dependent on another person’s tax return.
* If you have participated in a Health Care Flexible Spending Account during any portion of the BP plan year, you may not switch to the Health+Savings medical option and/or contribute to the Health Savings Account during the remainder of that plan year.

How to enroll

When you enroll in the Health+Savings Option, Aetna will send your information to PayFlex, and PayFlex will set up your account. After you pass a customer identification process, you will receive a mailing with your PayFlex Card® (your HSA debit card) as confirmation that your HSA has been established. In some cases, PayFlex may request that you verify personal information (e.g., Social Security number, home address, date of birth) before opening your HSA.

To access your account information, log on to the Aetna website at www.aetna.com using your Aetna login information. Your HSA Information will be accessible through the website. See the HSA Quick Reference Guide for tips on how to manage your account online.

You can start, stop and change your contribution amount at any time, as long as you don’t exceed the annual maximum. While employed at BP, you must be enrolled in the Health+Savings Option to continue contributing to your HSA.

Note that if you dis-enroll from the Health+Savings Option during a calendar year, this could have a retroactive effect on the tax-free nature of some of your HSA contributions – either made by BP or you. You should consult a tax advisor for any tax issues related to the HSA.

BP’s contributions to your HSA

As part of the wellness program mentioned earlier, if you complete and return a physician certification form showing that your physician certifies that three out of the five of your metabolic syndrome screening results are within the normal ranges, BP, through the plan, will contribute an additional $1,000 to your HSA. If you cannot meet three out of the five metabolic results, there is an alternative method for you to obtain the $1,000 contribution to your HSA. Your physician can document on your form that those areas have been discussed and are being managed, which would still qualify you for the additional plan contribution. Your physician must check that box in order for you to qualify for the $1,000.

If your spouse/domestic partner also completes a physician certification form and his/her physician certifies that three out of the five metabolic syndrome results are within normal ranges, he or she will also earn $1,000, for a family total of $2,000.

To qualify for the additional HSA contributions, send your family’s physician certification forms to StayWell, BP’s Wellness Program administrator.

If there is a medical reason why the above processes to obtain the $1,000 plan contribution are insufficient for you, additional reasonable alternatives will be provided to you. Please contact StayWell to discuss those alternatives, if necessary. Note that simple unavailability later in the year, either via travel or business reasons, will not be a reason to request an alternative process.

Your contributions to your HSA

You can contribute to your HSA through automatic payroll deductions at BP, or you can mail a deposit coupon and payment directly to PayFlex, our HSA administrator. Use the HSA Contribution Coupon to deposit new funds via check.

For the 2018 calendar year, the IRS allows up to $3,450 to be contributed for employee-only coverage and up to $6,900 for family coverage. Please note that any contributions made to your HSA by the plan for completing and returning the physician certification form count toward the maximum amount which can be contributed to your HSA during the year.

During annual enrollment, you decide how much to contribute to your HSA on a before-tax basis, up to the IRS limits, which can change annually. Your contributions will be deducted from your paychecks throughout the year.

If you’re over age 55, you’re also eligible to make an additional $1,000 catch-up contribution per year to your HSA. If your spouse is over age 55, he/she may also make an additional $1,000 contribution to an HSA, but he/she may not make that contribution to your HSA.

You should keep track of your contributions to ensure you don’t exceed these limits. If you do, the excess will be taxed as ordinary income and is subject to a penalty. To avoid penalties, make sure to contribute less than the legal limits, or withdraw any excess contributions and interest on those contributions before the tax-filing deadline. See the HSA Quick Reference Guide for information on how to keep track of your contributions online.

Investment of your HSA

In addition to new contributions, your HSA account can grow through any investment income on your account.

Once your balance reaches $1,000, you have the option to open an investment account for your HSA. Your investment options include Asset Allocation, Fixed Income, and Equity Funds. Each fund has a different investment goal and offers a different level of investment risk and potential return. Accounts for domestic partners and retirees will be charged small monthly fees. For more information, go to www.aetna.com. See the HSA Quick Reference Guide for tips on how to choose your investments online.

Any interest or investment earnings on your HSA account are tax-free.

Spending your HSA

Once you have enrolled, you will receive a mailing with your PayFlex Card® that makes it easy to access your HSA money. Just swipe the card at the point of service for eligible health care expenses, and the funds will be taken directly from your account. Be sure to select “credit” rather than “debit” when you use your card, because the card does not have a separate PIN.

You can use your card to pay for health care products and services, including doctor and dentist visits, hospital stays, prescriptions and hearing and vision care. You may also use your card at some discount and grocery stores, as long as they have a system that can process a health care card. Note: The merchants and providers must accept MasterCard® in order for your card to work.

If you don’t make a payment at the point you receive the service, you should wait for the claim to be processed through the claim system. The doctor’s office or other provider may send you a bill requesting payment for the difference between the billed charges and the amount covered by your health plan. You can write your HSA debit card number on the doctor’s bill and submit it as payment, or you can pay for the expense out of pocket and reimburse yourself later. You should keep your receipts for all expenses.

You can use your debit card for health care bills that have a “Patient Balance Due” if your account is active, you incurred the expense in the current plan year and you have enough funds in your account. To do this, write your debit card number on the bill from the provider in the space requesting credit card information. Make sure you keep your original statement.

To file your claim online, go to the PayFlex site, My Dashboard, on the Aetna website at www.aetna.com. You can also complete a paper claim form and fax your claim to 1-888-238-3539 or 1-888-AET-FLEX or mail it to the following address:

Aetna Inc.

P.O. Box 4000

Richmond, KY 40476-4000

Remember to keep all receipts and documentation for future reference or to answer any questions that may arise.

Keep in mind that you can only use your debit card up to the amount already in your HSA, even though you expect to contribute more in the future. If you do not have enough money in your HSA to pay for an eligible medical expense, you’ll need to pay for the expense by some other means. Once the money is in your HSA, you can reimburse yourself for the amount you personally paid for the expense.

You will have access to your account online through My Dashboard on Aetna’s website at www.aetna.com. When you log in, you can track your expenses, claims and account balance, in addition to submitting claims online. See the HSA Quick Reference Guide for details on how to manage your account online.

Eligible expenses

You can use your HSA for eligible health care expenses for you, your spouse, or your dependents (even if they’re not covered under the Health+Savings Option), as defined by IRS Code Section 213(d).

According to current regulations, the expense must be primarily to alleviate or prevent a physical or mental defect or illness. Examples include prescriptions, doctors’ office visits, and vision and dental care. You can also use your HSA for some health care expenses not covered by your health plan, such as glasses or contact lenses, but such expenses will not count toward your deductible. For a complete list of eligible expenses, go to www.irs.gov or www.aetna.com.

Examples of expenses that do not qualify include most cosmetic surgery, health club dues, maternity clothing, and toiletries. In addition, insurance premiums are not an eligible medical expense for your HSA, though there are exceptions for long-term care coverage premiums and some types of retiree health premiums.

If you use your HSA for expenses other than eligible health care expenses, you automatically subject yourself to IRS penalties. However, the requirement to spend your HSA on eligible health care expenses no longer applies once you turn age 65 or if you become permanently disabled or die.

By law, PayFlex cannot require you to submit documentation backing up the reason for your HSA withdrawal. So it is very important that you keep your receipts as your reimbursements could be subject to a review by the IRS.

If you change medical plans or leave BP

Your HSA is “portable” — it belongs to you. This means that even if you change health plans, take a new job or retire, you can still use the money in the account to pay for eligible expenses. Remember, though, that you must be enrolled in a high deductible medical plan, not be claimed as a tax dependent by someone else and not be enrolled in Medicare to make contributions to your HSA.

If you have an HSA in one year and choose a BP medical option that doesn’t allow for HSA contributions in a future year, you can still use any balance remaining in your HSA for health care expenses. You won’t be able to make new contributions or receive any BP contributions to your HSA while you aren’t enrolled in an eligible high deductible health plan like the Health+Savings Option. As well, this may render some of the contributions to your HSA taxable. You should consult a tax advisor before taking this step.

If you leave BP, any remaining money in your HSA account is still yours. You can transfer it to another HSA account or keep it with PayFlex, paying any required administrative fees.

 

Publication date: April 2018

 

Related links

Learn more about how the Health+Savings medical option works
Basic information about how your HSA works.
A guide to managing your HSA account through My Dashboard on the Aetna website.
Form used to add new contributions to your HSA via check.
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