A Health Savings Account (HSA) is a tax-advantaged savings account that allows you to contribute money for present and future health care expenses. It allows you to save pre-tax dollars up to the IRS annual limits to pay for medical expenses that aren't covered by the medical plan, such as the annual deductible.

Benefits of an HSA

Watch this video from PayFlex to learn more about how to use your HSA!

Interactive PayFlex Advisor

Not sure how much to contribute? Or how much you’ll save? Use this interactive advisor tool from PayFlex to help you understand the benefits of enrolling in a pretax account and how much to contribute.

A Three-Way Tax Advantage

  1. You can contribute to the account on a tax free basis — and receive monthly employer premium rebate credits. You decide when to spend or save your deposits.
  2. Your account earns interest right away — tax free! When you have a minimum account balance of $1,000, you can choose to invest in a wide selection of mutual funds offered through PayFlex.
  3. When you withdraw your funds to pay for eligible health care expenses, the funds are typically tax free.

Making Contributions

You can change your contribution at any time in Dayforce. You can add to or reduce the amount deducted from your paycheck subject to certain deadlines. You can stop contributing altogether or make one-time lump sum contributions as well. Unlike a Flexible Spending Account, or FSA, HSA money carries over from one year to the next.

Note: If an individual is enrolled in another plan that is not a CDHP, including Medicare, he or she cannot contribute to an HSA.

An HSA Stays With You

When you enroll in and contribute tax-free money into an HSA, your unused funds roll over from year to year. Also, if you ever leave or retire from your job, your funds go with you.


What are the IRS annual limits for HSAs in 2018?
For 2018, the maximum amount you can contribute is as follows:

  • $3,450 for individual coverage
  • $6,900 for family coverage
  • $1,000 catch-up contributions for participants age 55 or older ($4,450 or $7,900 total)

What medical expenses can be paid from an HSA?

Generally, any qualified medical expenses can be paid from the HSA. These qualified expenses include:

  • Deductibles and coinsurance amounts for qualified medical, prescription drugs, dental and vision services for you and your eligible dependents
  • Qualified long-term care insurance premiums

Any amount you use for non-qualified medical expenses will be taxed at your income rate plus a 20 percent penalty. Remember that over-the-counter medications are 100 percent covered if filled with a prescription. Go to PayFlex.com for a list of eligible expenses.

Can I use the HSA to pay for prescription drug, dental and vision expenses?
Yes, as long as they are qualified health care expenses. The HSA is like a savings account. When you have a qualified medical expense, you decide if you want to pay for it with money in your HSA. The HSA cannot be forfeited or expire.

What is a Limited Purpose Health Care FSA?
The law states you cannot have both an HSA and a Health Care FSA at the same time. Instead of a regular Health Care FSA, you may elect a Limited Purpose Health Care FSA. Limited Purpose Health Care FSAs can be used for out-of-pocket dental and vision expenses only. Learn more about Limited Purpose Health Care FSA

Can I have both an HSA and FSA at the same time?
IRS rules state you cannot have both an HSA and a general purpose Health Care Flexible Spending Account (FSA) at the same time. You can, however, elect a Limited Purpose Health Care FSA. Learn more about using both accounts

On Medicare?
IRS rules state you cannot contribute to an HSA once you're on Medicare. You can, however, continue using the funds you contributed to your HSA before your Medicare participation began. Speak with your HSA administrator if you have questions about avoiding tax penalties.

Use the ​Plan Comparison Tool to find out what plan is right for you

​​Watch a video to learn 7 Ways to Save on Prescription Drugs

Estimate your drug costs for 2018 using the Prescription Cost Estimator Tool

Find more helpful tools in the Resource Library