Employee Handbook

Section 7 — Employee Benefits

For employees enrolled in the Savers Plan, the City provides a Health Savings Account (HSA). An HSA is a tax-exempt trust established by an individual to pay for qualified medical expenses. Contributions made to your Health Savings Account can be deducted from regular full-time and three-quarter part-time employees’ pay before Federal income tax withholding and Social Security taxes are calculated and deducted. The result is that taxable income is reduced by the amount of such premium payments and other allowable expenses. These plans are allowed under Section 125 of the Internal Revenue Code.

Health Savings Account

Eligible employees can contribute up to $3,050 for single coverage and $6,150 for family coverage on a pre-tax basis per year to their HSA. There may also be catch up provisions for individuals between the ages of 55-65. Contact Human Resources for current catch up provision amounts if you are eligible. This money can be used to pay for health care expenses that are not reimbursable under health insurance, including co-pays, deductibles and out-of-pocket expenses for dental and vision care.  

Distributions from an HSA are tax-free if used to pay for the following:

• Costs that are not covered by medical, dental, or vision insurance, including deductibles, co-payments, treatments not covered by insurance, and charges in excess of reasonable and customary charges.

• Orthodontic treatments.

• Hearing care, including hearing aids and special telephones or televisions for those who are hard-of-hearing.

• Prescription medicines and drugs.

• Psychoanalysis and psychiatric therapy, including inpatient treatment.

• Chiropractic treatment.

• Medical equipment.

• Treatment for drug or Alcohol addiction.

• Transportation to necessary medical care, including ambulance services and mileage to and from appointments plus parking fees.

• COBRA coverage premiums.

• Health insurance premiums while receiving unemployment.

• Some types of insurance for Medicare-eligible individuals.

Enrollment Criteria

In order to qualify to have a Health Savings Account:

• you must be covered by a qualified high deductible health plan (which the Savers Plan is)

• you must not be enrolled in Medicare

• you must not be covered by a low or no deductible health plan

If you or your spouse is enrolled in a health care Flex Spending Account, this prevents you from contributing to a Health Savings Account. You may have a Limited Purpose Flex Spending Account. For information about a Limited Purpose FSA, please contact Human Resources.

Banking Function

Accounts are handled like a checking account with statements, web access, checks and a debit card. The bank may also assess fees, such as a setup fee, monthly fee, transaction fees, NSF or overdraft fees. Make sure to read the application packet thoroughly to ensure you understand your rights and responsibilities before establishing an account.

Although an employee may have more than one health savings account, the City can limit the banks it will fund contributions to. Please contact Human Resources for information on banks the City has partnered with and/or an application.

Separation of Employment – Health Savings Account

A Health Savings Account is a personal account that belongs to the member, however any contributions made by the City will cease upon separation of employment. 

All statements of coverage are subject to the terms, conditions, restrictions and other eligibility requirements set forth in plan documents, which is the final word in terms of eligibility and coverage. See your Summary Plan Description Booklets for an overview of coverage and more details on the above named benefits. It is advisable to contact a tax advisor before enrolling in a Health Savings Account. Health Savings Accounts are regulated by the IRS and may involve tax implications.