Health Savings Account (HSA)
Stay on top of rising medical expenses by paying for them with pre-tax dollars.
Saving money pre-tax to pay for medical expenses is one of the best tricks to keeping your costs down. If you’re enrolled in the HDHP plan, deciding to open a Health Savings Account (HSA) is a smart choice: the plan is specifically designed to be paired with an HSA. Knowing how much to contribute and how to get the most out of it will take some education.
Generally, the HSA is available to employees and their dependents in the United HealthCare High Deductible Health Plan. Read more about HSA eligibility here.
- ServiceNow contributes money to your HSA – $1,000 for single coverage and $2,000 for employee + dependent(s) coverage, assuming you’re enrolled in the HDHP as of January 1. These amounts are prorated if you enroll after January 1.
- ServiceNow’s contribution and any contribution you elect are effective as of the first of the month following the effective date of your enrollment in the HDHP.
- It’s triple tax-advantaged: You don’t pay federal taxes on the money you set aside, your balance earns interest tax-free, and you won’t pay taxes on withdrawals (for qualified expenses).
- Your funds never expire and are yours to keep even if you leave the company.
- You can adjust your payroll contribution at any time during the year.
- You can invest your HSA and earn interest on your balance.
IRS rules to keep in mind
- You must spend your funds on qualified medical, dental, and vision expenses. See what qualifies as an eligible expense and what does not.
- The 2023 maximum allowed contribution to your HSA is $3,850 for single coverage and $7,750 for employee + dependent(s) coverage (this limit includes ServiceNow’s contribution to your HSA).
- An additional $1,000 is allowed at age 55+.
- If you have an HSA, you cannot also have a general-purpose FSA. However, you can have an HSA and a limited FSA covering just vision and dental. You may also use the limited FSA for medical and prescription expenses once you have satisfied your annual medical deductible.
Domestic Partners and HSAs
Although Domestic Partners may be covered on the health plan, they are not treated as spouses for HSA purposes. You cannot reimburse your domestic partner’s expenses tax-free from your HSA unless that individual qualifies as being your tax dependent. The following rules also apply:
- You generally cannot reimburse your domestic partner’s children’s eligible expenses, whether or not they are covered on your health plan.
- If you have family coverage, you can contribute up to the IRS family maximum, even if your domestic partner is not HSA-eligible.
- If your domestic partner is otherwise HSA-eligible, he or she can open an HSA through their employer to reimburse his or her own (and dependents’) expenses tax-free.
- If you and your domestic partner are enrolled in family coverage and you both open and contribute to HSAs, you can both contribute at the IRS family level.
- The rules for same sex married couples are the same as for any other married couple.