About Health Savings Accounts

There are a number of ways to control our health care expenses. In addition to making better lifestyle choices, consider a consumer-driven health plan (CDHP) and its companion, the health savings account (HSA). In order to have an HSA, you must have a CDHP.

An HSA, which is a special, tax-qualified consumer bank account, allows you to set aside money to pay for qualified health-related costs. You can direct money to the account and, a bonus of state employees, if you are covered by one of the state’s CDHP/HSAs, the state will prefund the account and make biweekly payments throughout the calendar year. Regardless who makes deposits into the account, all funds in your HSA belong to you, the employee. Even if you leave state employment. The money goes with you and it’s tax-free. Unlike the flexible spending account, money in an HSA accumulates. There is no use-it-or-lose-it consequence. The money can roll over year after year.

With an HSA, you can decide how much to contribute to the account, whether to pay for current medical expenses from it or save for the money for future use.

State contribution to health savings accounts in 2013

HSA Account Coverage Initial Contribution* Bi-Weekly Contribution Monthly Contribution Maximum Annual ER Contribution
HSA 1 w/CDHP 1 Single
HSA 2 w/CDHP 2 Single

*Initial contribution as listed above apply to employees with a CDHP effective between 1/1/13 thru 6/1/13 and with an open HSA. CDHPs effective after 6/1/13 but before 12/1/13 and with an open HSA, will receive 1/2 of the initial contribution.

Employees participating in CDHPs are reminded that they must open an HSA in order to receive the state's HSA contribution.

Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements:

  • You must be covered under a consumer driven health plan (CDHP), on the first day of the month
  • You have no other health coverage except another qualified CDHP
  • You are not enrolled in Medicare (Read FAQs about HSAs and Medicare)
  • You cannot be claimed as a dependent on someone else’s tax return

IRS Publication 969

Get help from Tower Bank

The HSA Authority, Tower Bank provides the HSA program for the state of Indiana.

Contact Tower Bank

Phone: 888-HSA-TOWR