2025 Benefits Guide- updated 10-20 - Flipbook - Page 15
Health Savings Account
What is an HSA?
A Health Savings Account, or HSA, is a tax-advantaged savings account available to taxpayers
who are enrolled in a high deductible health plan - at VELCO that means being enrolled in our
CIGNA HDP. HSAs allow for both employer and employee contributions; funds contributed to an
HSA are not subject to federal or state income tax (with the exception of California and New
Jersey). HSA funds may be used to pay for qualified medical expenses at any time, without tax
liability or penalty. Unlike a flexible spending account (FSA), unused funds roll over and
accumulate year to year. And, HSAs are individually owned, which means that you take your
account with you when you leave VELCO.
What expenses can be paid through an HSA?
HSAs can be used to pay for unreimbursed healthcare expenses as listed in IRS Code Section
213(d). Some examples of HSA-eligible expenses are deductibles, co-insurance, co-pays,
acupuncture, durable medical supplies, hearing aids, orthodontics, and artificial limbs.
Where will my HSA be administered?
VELCO partners with Fidelity for HSA services. Employees newly enrolled in the HSA plan will
be instructed how to set up their Fidelity HSA.
How do I pay for healthcare expenses with my HSA?
HSA account holders will receive a debit card from Fidelity. This card can be used for HSAeligible expenses at qualified locations. Alternatively, you may file a claim for reimbursement
from your Fidelity HSA. You are responsible for keeping receipts in the event the IRS audits your
tax return.
What happens to the money in the HSA if I don’t file any claims?
The money remains in the account and rolls-over from year to year. Investment options are
available. Please check with HR or Fidelity for more information.
