Health savings account

PC(USA) employers, congregations, and affiliated employers can take advantage of preferred pricing for Benefits Plan members when choosing to offer an HSA through HealthEquity for employees who enroll in an HDHP medical option and are not covered by any other medical plan. These accounts offer employees a tax-advantaged way to pay for healthcare expenses.

Health savings accounts are also a convenient way for employees to save for future healthcare expenses. Unused funds roll over from year to year, and the account is fully portable, so it can be used after employment ends and into retirement.

The Board urges employers that select an HDHP option to offer an HSA as a way to help employees pay for the higher deductibles that apply with these options and save for future healthcare expenses.

Tax advantages

Employees generally make contributions to their health savings account through pretax payroll deductions, up to limits set annually by the IRS. These contributions are exempt from federal income and FICA (Social Security and Medicare) taxes. For ministers of the Word and Sacrament, these contributions are also exempt from SECA taxes.

Employers also may make HSA contributions on the employee’s behalf. These contributions are not taxable to the employee. Both employee and employer contributions count toward the annual IRS limit.

Employees earn tax-free interest on their HSA balances, and distributions for eligible healthcare expenses are tax-free.

Eligible expenses

Employees may use funds from their health savings account to pay for qualified healthcare expenses for themselves or any family member that the employee can claim as a dependent for tax purposes, regardless of whether the family member is enrolled in the Medical Plan.

Qualified expenses are medical, dental, and vision expenses that can be claimed as a tax deduction. Examples include, but are not limited to, deductible and coinsurance amounts, dental or orthodontia treatment not covered by dental coverage, and prescription drugs.

Eligibility

If you offer an HDHP medical option to your employees through the Benefits Plan, the Board of Pensions urges you to also offer a health savings account and, if possible, to contribute to these accounts on employees’ behalf. To be eligible to set up and make contributions to an HSA, the employee:

• must be enrolled in an HDHP
  
• cannot be covered by any other medical plan that is not an HSA-compatible health plan, including a spouse's medical plan
  
• cannot typically be enrolled in a healthcare flexible spending account
  
• cannot be enrolled in Medicare or TRICARE
  
• cannot be eligible to be claimed as a dependent on someone else's tax return
  
• must be a U.S. resident
  

Cost

Employers pay $2.25 per month for each employee who establishes an HSA. HealthEquity bills each employer directly for this monthly fee. There are no set-up or annual renewal fees for these accounts.

Questions about health savings accounts?

Employers who currently offer benefits through the Board of Pensions can call 800-PRESPLAN (800-773-7752) (TTY: 711) to speak with an Employer Services representative. They can answer questions about benefits and offer support on administering benefits through Benefits Connect.

PC(USA) employers and congregations are encouraged to reach out to their Church Consultant to help determine which dues package is right for their situation, understand available benefits for staff and how to structure them, and guide faithful benefits decision‑making.

About HealthEquity

HealthEquity is a national leader in health savings and spending account administration. With $34 billion in HSA assets under management, HealthEquity guides more than 17 million account holders across the United States in saving and spending wisely on their healthcare.