HDHP and a Health Savings Account (HSA)

HDHP and a Health Savings Account (HSA)

The High Deductible Health Plan (HDHP) is the only MIT health plan eligible for a health savings account (HSA); you must be enrolled in the HDHP to open an HSA through MIT and receive MIT’s contribution.

The HSA holds the money that you can use to pay for eligible medical expenses, including dental and vision expenses. The HSA offers tax advantages both while you’re enrolled in the HDHP as well as in your future, because your contributions, earnings, and withdrawals are all tax-free. The HSA encourages you to think about health care in new ways:

  • If you are close to retirement, you can use the HSA to save for future health care expenses, especially those incurred before you become eligible for Medicare.
  • If you are healthy and primarily receive preventive care, you can pay less in payroll deductions and contribute your savings to the HSA.

HSA contributions chart

Both you and MIT contribute to the HSA. When you open an HSA, MIT will contribute to your account based on your health plan coverage:

  • $500 for employee coverage
  • $1,000 for an employee + spouse or domestic partner (if a tax dependent), employee and child(ren) or family coverage

If you would like to fund your deductible from your HSA, you would need to deposit a minimum of:

  • $1,000 (+ $500 MIT's contribution) = $1,500 deductible for employee coverage
  • $2,000 (+ $1,000 MIT's contribution) = $3,000 deductible for employee + spouse or domestic partner (if a tax dependent), employee + child(ren) or family coverage

HSA and FSA eligibility

Per government regulations, if you enroll in the HSA, you will not be eligible for a Health Care Flexible Spending Account (FSA) – even if you do not contribute funds to your HSA. If you enroll in the HSA, you cannot carry over any health care FSA funds to 2018 and will need to use those funds by December 31. You will still be eligible for a Dependent Care Flexible Spending Account (FSA).

How to enroll in an HSA

If you select the HDHP, you will not be automatically enrolled in an HSA. You will need to open an HSA on the Fidelity NetBenefits website before January 1, 2018 to receive MIT’s contribution ($500 for an employee account and $1,000 for an employee + spouse or domestic partner (if a tax dependent), employee and child(ren) or family). If you open an HSA after January 1, 2018, you will forfeit MIT’s contribution; it will not be pro-rated. MIT’s contribution will be available for you to use for qualified medical expenses on January 5, 2018.

For new employees hired throughout the year and employees who experience a qualifying life event: MIT’s contribution will be pro-rated monthly and the money will be available on the date coinciding with your first paycheck. For example, if you were hired on February 15, MIT will pro-rate 11 months and your money will be available in your HSA on the same date that you receive your first paycheck.

HSA contributions (by you and MIT)

Employee contribution: Once you open an HSA, you will determine your annual contribution: $0 - $2,950 (employee) and $0 - $5,900 (employee + spouse or domestic partner (if a tax dependent), employee + child(ren) or family). Your contribution will be deducted from your MIT paycheck in equal installments, pre-tax. You can change your contribution at any time through the Fidelity NetBenefits website. There is no required annual minimum contribution, but there is an annual maximum contribution set by the IRS. The 2018 maximum contribution set by the IRS—including MIT’s contribution—is $3,450 (employee) and $6,900 (employee + spouse or domestic partner, employee and child(ren) or family). Note: If age 55 or older, the maximum will increase by $1,000.

MIT contribution: MIT will contribute to your HSA in one lump sum, once per year on January 1 ($500 for an employee account and $1,000 for an employee + spouse or domestic partner (if a tax dependent), employee and child(ren) or family). You will receive MIT’s contribution even if you decide not to contribute to your HSA, and it will remain in your HSA, even if you don’t need to use it.

The maximum contribution $3,450 (employee) and $6,900 (employee + spouse or domestic partner (if a tax dependent), employee and child(ren) or family) includes MIT’s annual contribution. You cannot contribute to your HSA post-tax over the maximum contribution. Your HSA balance will stay in your account, even if you don’t spend it at year’s end—it’s yours to keep for future expenses.

Qualified medical expenses

You can use an HSA to pay for qualified medical expenses only. View a list of qualified medical expenses on the IRS website. You do not need a note or prescription from your health care provider for HSA purchases, but you are responsible for determining whether a particular expense is a qualified medical expense.

Using an HSA to pay for qualified medical expenses

Your medical bill will be sent directly to you from your health care provider, not Blue Cross Blue Shield or MIT. Some health care providers may insist on payment up front. You will receive a debit card for your HSA from Fidelity (in about 10 business days after you enroll), which you can use to pay for qualified health care services and prescriptions.

Investing your HSA (How Do I Invest My HSA?)

For information about investing in your HSA and to make any changes to your investments, visit the Fidelity NetBenefits website.

invest in your HSA chart

Selecting a beneficiary

Visit the Fidelity NetBenefits website to add a beneficiary to your HSA.

If you leave MIT/retire/change health plans

MIT employees who open an HSA “own” their account, and can take it with them if they leave MIT, retire, or switch health plans.

Additional Resources

  • Access additional information about HSAs—including a video, articles, and infographics—on the Fidelity HSA website.
  • Still need help? If you are a campus employee and have benefits questions, please contact the Benefits Office at benefits@mit.edu, or call 617-253-6151. If you are an employee at Lincoln Laboratory, please contact benefits@ll.mit.edu or call 781-981-7055.