Health Saving Account

Health Savings Account (HSA) through Optum Bank

If you enroll in one of the State's High Deductible Health Plans (HDHP), you may be eligible to open a Health Savings Account (HSA) through Optum Bank. An HSA is a tax-advantaged savings account that can be used to pay for eligible healthcare expenses. 

What are the benefits of an HSA?

A Health Savings Account (HSA) helps you plan, save and pay for healthcare.

  • The State of Colorado contributes $60 per month to your account. You will not receive state contributions until you open an account through Optum Bank.
  • You own your HSA. The money belongs to you, even deposits made by others to your HSA.
  • Anyone can contribute to your HSA. You, your employer, family members or anyone else can deposit money into your HSA. There are no restrictions on who can put money into your HSA.
  • You keep your HSA. All the money in your HSA (including contributions deposited by your employer or anyone else) remains yours even if you change jobs, change health plans or retire.
  • Your HSA has tax benefits. Money goes into and comes out of an HSA tax-free (as long as HSA funds are used to pay for qualified healthcare expenses).

Eligibility Requirements

Health Savings Account (HSA) Eligibility Requirements—You can open a Health Savings Account (HSA) at Optum Bank if you:

  1. Are an active State of Colorado benefits eligible employee on the first day of a given month.
  2. Are enrolled in a State of Colorado sponsored HSA-qualified High Deductible Health Plan (HDHP) on the first day of a given month.
  3. Are not covered by any other non-HDHP health plan, such as a spouse’s plan, unless it is permissible coverage like dental, vision, long-term care, disability, accident, and insurance covering certain types of liabilities, specific illnesses or diseases, or hospitalization.
  4. Are not enrolled in any part of Medicare.
  5. Do not receive health benefits under TRICARE or TRICARE for Life.
  6. Have not received Veterans Administration (VA) benefits within the past three months. (Some exclusions may apply).
  7. Cannot be claimed as a tax dependent on another person’s tax return.
  8. Are not covered by a general purpose healthcare flexible spending account (FSA) or health reimbursement account (HRA). Alternative plan designs, such as a limited purpose FSA or limited purpose HRA, are permitted.

For complete HSA rules, see IRS Publication 969 for details. Other exclusions may apply. Contact Optum Bank at 866-234-8913 for questions.

HSA Contribution Limits—Calendar Year 2020

HSA contribution limits are determined every year by the Internal Revenue Service (IRS) under section 223 of the Internal Revenue Code (IRC). For 2020, the statutory annual HSA contribution limit is $3,550 if you have individual HDHP coverage and $7,100 if you have family HDHP coverage. The IRS also allows you to make an extra catch-up contribution of $1,000 if you are age 55 or older. You can make contributions to your HSA all the way up to the tax-filing deadline (usually April 15) and still get tax credit for the previous calendar year.

2020 Annual HSA Contribution Limits Individual Coverage Family Coverage
Maximum Annual Contribution Limit $3,550 $7,100
Catch-up Contribution Limit (age 55+) $1,000 $1,000

Note: These IRS statutory contribution limits apply to the combined total of all of your HSA deposits including contributions from you, your employer, family members or anyone else.

Note: Catch-up contributions can be made during the calendar year in which the HSA participant turns 55.

Important Disclosures

  • Health Savings Accounts (HSAs) are individual accounts and are subject to eligibility and restrictions, including restrictions on distributions for qualified healthcare expenses set forth in section 213(d) of the Internal Revenue Code (IRC).
  • State taxes may apply. While Health Savings Accounts (HSAs) were created by the federal government, states can choose to follow federal tax treatment guidelines or establish their own. Please consult your tax advisor or state department of revenue for more information.
  • If you are not age 65 or not enrolled in Medicare benefits or not disabled and you use your HSA funds for nonqualified purposes, any HSA funds used for nonqualified purposes are taxable as normal income and also subject to an additional 20 percent (20%) IRS tax penalty.
  • After you turn age 65 or become enrolled in Medicare benefits, you may withdraw money from your HSA for nonqualified purposes without being subject to the 20 percent (20%) IRS tax penalty. The HSA fund withdrawal is treated as retirement income and is subject to normal income tax. The same holds true if you become disabled before age 65; you are not liable for the 20 percent (20%) IRS tax penalty and the HSA fund withdrawals are taxable as normal income.
  • Optum Bank fees may reduce HSA fund balances.
  • Federal and state laws and regulations are subject to change.

This information is not intended as legal or tax advice. We recommend that you consult a tax, legal or financial advisor to discuss your personal circumstances and for personal advice on eligibility, tax treatment and restrictions.

Forms:

Optum Bank - HSA Rollover or Transfer Request Form

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