Health savings account (HSA)

The health savings account (HSA) is a federal tax-free account maintained by HealthEquity, to help pay your out-of-pocket costs for health care.

You must be enrolled in UC Health Savings Plan to enroll in and contribute to UC’s HSA. However, the HSA is yours to keep if you retire, leave UC or switch to another UC plan. Here’s more about how the account works and how to use it to pay for qualifying expenses.

About the HSA

When you’re ready to use your funds, you can take them out of your HSA without paying any federal taxes. Contributions from you and UC, and your HSA earnings, are currently subject to California income tax.
You earn interest on your account, and can invest any funds over your $1,000 balance — the same way you invest funds in retirement savings accounts, except interest accrues federal tax-free.
You must have a valid Social Security number and U.S. address to establish your HSA.
Due to IRS rules, you cannot enroll in the Health Flexible Spending Account (FSA) and the HSA simultaneously.
You are responsible for administering your Health Savings Account (HSA). As an HSA owner, you decide:
- Whether you are eligible to make contributions to an HSA
- The amount of the eligible contribution to the HSA for any calendar year
- The withdrawal of any excess contributions
- How funds in your HSA will be spent, and
- Whether the distributions from your HSA are taxable or non-taxable.
You cannot delegate these responsibilities to either the University or to HealthEquity. Since as HSA owner you are in control of the HSA, you are responsible for reporting all contributions and distributions to the IRS on your Form 1040. If you make any errors and do not correct them timely, you must pay additional tax and/or penalties to the IRS.

Using your HSA for medical expenses

You can use your HSA funds to pay for your plan’s deductible and/or out-of-pocket maximum for all eligible health care expenses, or you can save your HSA funds until you turn 65. For a complete list of eligible expenses, read IRS Publication 502 on the IRS website.
Your claims from UC plans under Anthem, VSP and Delta Dental will be sent to HealthEquity. Make sure you only request reimbursement for those claims that are incurred after you have established your HSA.
If you choose to pay your health care provider or pharmacy using HSA funds, you can:
- Pay your bill with your HSA debit card
- Pay your provider directly through the HealthEquity portal
- Use another method of payment and request reimbursement through the HealthEquity portal

Employee benefits

Health savings account (HSA)

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