HEALTH SAVINGS ACCOUNT
HSA
A Health Savings Account (HSA) is a smart way to set yourself up for success. You can use it to pay for expenses now, or have a leg up on future expenses if you don't use all of your HSA money by the end of the plan year.
01. HOW DOES THE HSA WORK?
Your HSA is a personal bank account that works with the High Deductible Health Plan medical option. It allows you to set aside tax-free money to pay for qualified health care expenses.
You decide how much money you want to save in your HSA, and you can change it at any time. So if you didn't elect to set aside money in an HSA when you initially enrolled in your medical coverage, you can still do it through the enrollment website (whitecastlebenefits.bswift.com).
When you're ready to pay for care or prescription drugs, there are three ways to use your HSA to pay:
1. Use your HSA debit card: When you're ready to pay for qualified medical expenses, the funds will be taken directly from your account. Make sure you only use the card on qualified expenses, and that you have enough money in your HSA to cover them. Log on to the enrollment website to check your balance before hand.
2. Pay out of pocket: If you prefer, you can pay for your qualified expenses up front and pay yourself back through your HSA later. To get started, just log on to the enrollment website or contact Optum Health Bank. You'll be able to transfer money from your HSA to your regular bank account.
3. Set up direct payments to your providers: Another option is to have Optum Health Bank make direct payments to your provider from your HSA. Log on to the enrollment website (whitecastlebenefits.bswift.com) to set up direct payment.
IMPORTANT REMINDERS:
- Keep Receipts: Always remember to save your receipts when you make payments from your HSA, in case you need to prove to the IRS how you spent your HSA funds.
- Qualified Expenses: Find a list of qualified expenses at irs.gov/publications/p502. Keep in mind, if you use money from your HSA to pay for nonqualified expenses such as child care, cosmetic surgery, health club fees, teeth whitening products, or vitamins - you'll pay taxes on that money and pay an additional 20% penalty tax if you're under age 65.
02. WHAT'S GREAT ABOUT THE HSA?
While no one likes taking money out of their paycheck, there are a number of advantages to setting aside a little money into an HSA:
- It's tax-free when it goes in. You can put money into your HSA on a before-tax basis through convenient payroll deductions. Not only do you save money on qualified expenses, but your taxable income is lowered.
- It's tax-free as it grows. You earn tax-free interest on your money. The interest you earn even earns interest.
- It's tax-free when you spend it. When you spend your HSA on qualified health care expenses, you don't pay any taxes. That means you're saving money on things like your medical coinsurance and deductibles.
- It's always your money. Just like a bank account, you own your HSA, so it's yours to keep and use even if you change medical plans, leave the company, or retire.
03. GROW YOUR HSA
You can use your HSA to get a head start on saving for future healthcare expenses. In fact, you can grow your HSA into a 401(k)-like nest egg for healthcare. Here are three ways:
- Your contributions: For 2026, you can save up to $4,400* if you're covering just yourself, or $8,750* if you're covering yourself and family members.
- Interest: Your account earns tax-free interest. Over time, the interest you earn even earns interest!
- Investment Earnings: You can invest your HSA balance that exceeds $1,000. This is a great way to put your money to work for you and an opportunity to grow your HSA more quickly. Note: You will not be able to use your invested HSA balance for qualified expenses.
* If you're age 55 or older (or will turn age 55 during the plan year), you can also make additional before-tax "catch-up" contributions to your HSA, up to $1,000.
04. ELIGIBILITY
The HSA isn't for everyone. You're only eligible if you are:
- Enrolled in the High Deductible Health Plan.
- Not enrolled in other non-HDHP medical coverage, including Medicare, Medicaid, or Tricare.
- Not a tax dependent.
- Not enrolled in a Healthcare Flexible Spending Account (FSA), unless it's a "limited purpose" FSA for dental and vision expenses only.
