What you need to know
A health savings account (HSA) is a special savings account that helps you save on taxes while you put away money to cover current and future eligible healthcare expenses. Think of it as a 401(k) for healthcare that’s paired exclusively with the Health Savings Plan. Check out this video for a quick look (2 minutes).
How the HSA Works
When you enroll in the Health Savings Plan, you have the option of electing a health savings account (HSA) with Optum Bank. Once you set up your HSA with Optum Bank and elect how much to contribute to your HSA, Sandia will match your contributions at 66 2/3% up to a maximum amount. Your pretax contributions are deducted automatically from your paycheck equally over the remaining paychecks for that year, reducing your taxable income in the process.
You can use the money in your HSA to pay for current eligible healthcare expenses tax-free, or you can pay out of pocket and grow your HSA to cover eligible healthcare expenses you may have in the future — even in retirement.
Your entire HSA balance rolls over from year to year, continuing to earn interest and grow tax-free until you use it. And once it reaches $1,100, you can invest part of it for even more growth potential. Any income you earn through investing may be tax free, too! See the caveats below.
Watch this 2-minute video to learn more about investing your HSA balance, and visit Optum Bank’s website to find rules, restrictions, and additional resources about investing.
Like any other savings account, your HSA is your personal account. It’s yours to manage and keep — even if you change medical plans, leave Sandia, or retire.
Setting Up Your HSA
After you enroll in the Health Savings Plan, you can open your health savings account (HSA) by enrolling in the Optum Bank HSA. Then, enroll through Sandia’s HR Self Service, to elect your HSA contributions.
Register with Optum Bank
Visit the Optum Bank enrollment site to set up your account.
You’ll need your Social Security number and a valid email address (use your personal email address). You may need to upload a copy of your Social Security card and a valid photo ID (driver’s license, passport, or state/government-issued photo ID).
Follow the prompts on the Optum Bank enrollment site, entering the following information for the plan:
- Group number: S97942
- Employer name: Sandia National Laboratories
If you already have an HSA with Optum Bank from a previous employer: Call Optum Bank at 866-234-8913 to connect that HSA with Sandia, so you can receive Sandia contributions through payroll.
Elect Your Contributions with Sandia
Once your account has been set up with Optum Bank, please wait at least three business days for Optum Bank to confirm your account information with Sandia. Then, through HR Self Service, submit your HSA life event to begin your contributions. Follow these steps:
- Go to Inside Sandia.
- Select HR Self Service, select the Benefits and Retirement tile, then choose Life Events.
- Select I want to enroll in HSA.
- Enter the date of your election (must be a future date).
- Select Start Life Event.
- Complete the steps listed and Submit.
Contributions will begin the following pay cycle, and the annual elected amount will be divided among the remaining paychecks in the calendar year.
If your HSA has not been set up with Optum Bank, your request will not be accepted.
You can increase or decrease your HSA contributions by submitting an HSA Change eForm. Changes can only be made one time per month. Account holders are responsible for ensuring the annual IRS maximum allowed contribution is not exceeded each year.
How It’s Funded
You and Sandia both contribute to your HSA.
Your contributions are deducted from your paycheck before taxes are computed, so they reduce your taxable income.
Your contributions, combined with Sandia’s, can’t exceed the contribution maximums set by the IRS, see below.
2024:
- If you have employee only coverage, you can contribute up to $4,150.
- If you have coverage with a dependent(s), you can contribute up to $8,300.
If you are 55 or older, you can contribute an additional $1,000 as a catch-up contribution each year.
Sandia matches your contributions at 66 2/3%, which means that a $100 contribution earns you $66.67 from Sandia. When you contribute more, you get more from Sandia, up to these annual maximums:
| Sandia HSA matching contribution |
|
| Incentives for completing all healthy activities | As you (and your covered spouse) complete healthy activities — including your health assessment, a Health Action Plan, and other activities that build your Virgin Pulse points — Sandia will deposit even more into your HSA. You can earn up to:
Sandia will deposit the incentives you earn in the previous plan year into your account in January of the new plan year. Check your progress through the Virgin Pulse portal. |
Need help figuring out how much to contribute?
Optum Bank’s health savings account calculators can help!
The IRS sets annual HSA contribution maximums. They include your contributions and Sandia’s. For 2024, the maximum is $4,150 in pretax dollars if you have employee only health coverage, and up to $8,300 if you’re covering qualified dependents. If you’re age 55 or older, you can add a $1,000 catch-up contribution to your account.
You’ll need to factor in:
- The incentives you earn for completing healthy activities through Virgin Pulse
- How much of your own money you’ll contribute
- Sandia’s matching contributions to your HSA
It’s your responsibility to make sure that total annual contributions to your HSA — yours and Sandia’s combined — do not exceed the IRS maximum.
The Triple Tax Advantage
One of the advantages of investing in an HSA is that it helps you save on taxes three ways! With an HSA, you pay no taxes* on:
- Money you and Sandia contribute
- Money your HSA earns from interest and investments**
- Money you use from your HSA to pay for eligible healthcare expenses (see the list)
*California and New Jersey treat HSA contributions as taxable income for state income purposes; in addition, New Hampshire and Tennessee tax HSA interest and investment earnings.
**Refer to Optum Bank’s website for more information about tax rules and restrictions on investing.
Save your receipts!
When you pay out of pocket for HSA-eligible healthcare expenses, you can submit them for reimbursement at any time — immediately, months or years later, or even during retirement.
Using Your HSA
It’s important to understand that your HSA is your account, and the money in it is yours to spend for eligible medical expenses — however and whenever you want.
After your account is opened, Optum Bank will send you an HSA debit card to use to pay providers at the time of service. You can use whatever balance is available at that time. Unlike the healthcare FSA, your annual contribution accumulates in your HSA with each paycheck — it’s not all available at the beginning of the year. You can use only the funds that are in your account at any given time. Alternatively, to build your HSA balance for future expenses, you can pay out of pocket. Save and store your receipts, then submit them for reimbursement at any time through the Optum Bank website.
Optum Bank makes it easy for you to manage your HSA. You can keep track of your contributions, balance, and transactions online or through the Optum Bank app.
To get better acquainted with your HSA, visit the Optum Bank website. You’ll find:
- Calculators to help you determine how much to save — and what your savings could look like decades from now.
- Webinars to get up to speed on maximizing your HSA contributions, investing, retirement, and all the tax benefits your HSA offers.
- Videos that explain everything you need to know to make the most of this unique savings account.
You can use the money in your HSA to pay qualified expenses for yourself and eligible dependents only.
The IRS determines what expenses qualify as HSA-eligible expenses. In addition to paying for covered services and prescription drugs for yourself and any eligible dependents, you can use your HSA to pay for eligible over-the-counter medications, healthcare supplies, feminine care products, and dental and vision care expenses.
To learn whether or not you can use your HSA to pay for a specific medical expense, review Optum Bank’s list of HSA qualified medical expenses.
Also remember, your HSA is your account. You can withdraw money from it at any time. However, if you withdraw funds before reaching age 65 for expenses other than qualified healthcare expenses, your distributions could be subject to income taxes and an additional 20% tax penalty. After you reach age 65, you can withdraw the funds for non-qualified healthcare expenses without penalty, but the amounts withdrawn will be taxable as ordinary income.
You can change your HSA election amount by submitting an HSA Change eForm. Changes can only be made one time per month. Please refer to this HSA article to obtain additional information on how to change your HSA contribution.
Health savings account holders may pay nominal monthly fees and transaction costs, as follows:
- Monthly HSA maintenance fee: $.95 per month (waived for accounts with an average balance of $3,000 or more)
- ATM fees: $2.50 per ATM transaction
- $20 for account closure or transfer
- $1.50 printed statement fee – Note: there is no charge for online statement delivery
- Monthly participant investment fee: 0.03% of investment balance capped at $2
- Minimum threshold for investing account balance: $1,100
To view the HSA Fee Schedule, log into your Optum account and take these steps:
- Select the “Accounts” tab
- Select “Account Management”
- Select the “Account Fee Schedule” option under the section titled “Account Fees”
The Fine Print
Annual HSA contribution maximums are set by the IRS, and they’re the combined total of your and Sandia’s contributions. If you exceed these limits, you’ll pay regular income tax, plus a 10% penalty on any excess contributions. (Note: If you and a member of your family each have an HSA, be sure that the total combined contributions don’t exceed the 2024 family maximum of $8,300.)
You cannot contribute to an HSA if:
- You’re covered by a non-high-deductible health plan, like your spouse’s plan or the Total Health PPO Plan.
- You’re enrolled in Medicare or TRICARE. (Important note: If you’re planning to retire and start Social Security, you may be retroactively enrolled in Medicare Part A up to six months from the date you apply. If you’re contributing to an HSA, to avoid paying additional taxes, you’ll need to stop your and Sandia’s contributions six months before you apply for Social Security.)
- You’re claimed as a dependent on someone else’s tax return (other than your spouse’s).
- You or your spouse is enrolled in a general-purpose healthcare flexible spending account or general purpose health reimbursement account. (With an HSA, it’s OK if you or your spouse participate in a limited purpose HCFSA or limited purpose HRA used to pay for eligible dental and vision expenses only.)
- You’ve received certain benefits from the VA or the Indian Health Service in the last three months.
Also, to open a health savings account you must pass through the U.S. Patriot Act screening process. Optum Bank will ask for your name, street address, date of birth, and other required information during the enrollment process. If some of that information does not match up to the federal database, Optum Bank will require additional information, which may include a copy of your driver’s license, Social Security card, or other identifying documents. If you do not pass the screening process, you will receive a letter from Optum Bank.
Contact Optum Bank at 866-234-8913 with questions regarding your eligibility.
Finally, you can begin using your HSA funds once your Optum Bank account is open and active. So be sure to complete the required steps as soon as you get your welcome kit from Optum Bank.
Contacts and Resources
Go to the Get to Know Our Benefit Providers page for details.
Complete your health assessment
In less than 30 minutes you can receive an insightful report on your health status and potential health risks. Knowing your status is the first step in improving your health!