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SPD > Benefits > 2008 Benefits > Health Savings Accounts Health Savings Accounts

The Health Savings Account (HSA) program has two parts: a high deductible health plan (HDHP) and an HSA.

The state’s HSA contribution level will remain the same for 2009. However, the state will pre-fund half of the employer contribution to the HSAs at the beginning of the year. This applies to employees enrolled in a High Deductible Health Plan (HDHP) effective from Jan. 1, 2009, through June 1, 2009. HDHPs effective after June 1, 2009, but before Dec. 1, 2009, will receive one half of the initial contribution.

State contribution to your health savings account in 2009

Plan
Coverage
Initial
Contribution 
Biweekly
Contrbution
Monthly
Contribution
Maximum Annual
State Contribution
HDHP 1/HSA Single
Family		 $687.96
$1,375.14		 $26.46
$52.89		 $57.33
$114.60		 $1,375.92
$2,750.28
HDHP 2/HSA Single
Family		 $468.00
$935.22		 $18.00
$35.97		 $39.00
$77.94		 $936.00
$1,870.44

If you have an active HSA with Tower Bank and wish to continue receiving the state’s contributions in 2009, you do not need to open a new HSA account with Tower Bank. If you wish to continue contributing to your account or begin contributing for 2009, you need to access your PeopleSoft record and enter your desired contribution. Your contribution amount for 2008 will not carry over to 2009.

If you are electing to participate in a HSA for the first time in 2009, you must edit the online HSA option and choose the HSA that corresponds to your medical HDHP election in order to receive the state’s contribution.

In addition to electing the HSA option, you will need to open a HSA account with Tower Bank before Jan. 1, 2009.  View instructions on how to open a health savings account with Tower Bank

State HSA contribution is based on the health savings account maximum contributions
HDHP 1/Single
HDHP 1/Family
HDHP 2/Single
HDHP 2/Family
Health savings maximum $3,000.00 $5,950.00 $3,000.00 $5,950.00
State contribution $1,375.92 $2,750.28 $936.00 $1,870.44
Allowable employee contribution $1,624.08 $3,199.72 $2,064.00 $4,079.56

Catch-up Provision for individuals over 55 is $1,000 for employee

Also see:
HSA Road Rules for Employees/Individuals

What it is a health savings account?

  • An HSA is an individual savings account in your name that allows you to set aside money for current and future medical expenses. It gives you the most benefit from your high-deductible health plan by allowing the use of pre-tax dollars in the payment of medical expenses. Unused funds that you retain in this account accumulate from year to year; there is no "use it or lose it" provision.
  • Eligible expenses that may be paid from this account include doctor's visits and prescriptions and dental and vision expenses. Your Tower Bank HSA also is an interest-bearing account.
  • An HSA can only be established in conjunction with a qualified HDHP. You must choose one of the State of Indiana's qualified plans (HDHP I or HDHP II) in order to be eligible to open an HSA. Other eligibility rules may also apply.
  • Individuals who are enrolled in Medicare*, who can be claimed as a dependent on another person's tax return, who have other insurance coverage that is not a qualifying HDHP, or who have received VA benefits within the previous three months are not eligible to open an HSA. Visit the Tower Bank Web site at www.towerbank.net/ or call 888-HSA-TOWR for details about eligibility and other HSA information.
    * - When you turn age 65 and sign up for Social Security benefits, you will automatically be enrolled in Medicare Part A. This will disqualify you from receiving the State’s contribution or making your own contributions into an HSA. You should decline to receive Social Security retirement benefits and decline Medicare Part A if you wish to open an HSA.

Why select a health savings account?

  1. You will pay lower medical insurance premiums.
  2. HSAs provide tax savings three ways - pre-tax contributions through payroll deduction, tax-free earnings (interest) and tax-free withdrawals for qualified medical expenses. Unlike other savings or retirement investment vehicles, if used for approved medical expenses, you will not pay tax on the money spent from your account.
  3. You control your funds. You decide how much of your own money to contribute to the account, which medical expenses to pay and whether to save the money in the account for the future or use it for current expenses.