Health Savings Account

If you enroll in the Anthem BCBS HDHP or Kaiser HMO HDHP, you also are eligible to enroll in a Health Savings Account (HSA). Every pay period, you can make an automatic pretax contribution to the HSA, and use that money later to pay for eligible healthcare expenses.

Eligible healthcare expenses may include:

The City of Atlanta will contribute to your HSA each year — $500 for individuals, and $750 for families (employee plus one or more dependents).

You also can contribute to the HSA up to certain IRS limits. In 2024, after the City’s contribution, you can contribute an additional:

  • $3,650 for individual coverage ($4,100 IRS limit minus $500 City contribution)
  • $7,550 for family coverage ($8,300 IRS limit minus $750 City contribution)
  • If you are or will be age 55 in 2024, you also can contribute an additional $1,000

You are responsible for monitoring the amount deposited into your HSA each calendar year. Keep in mind that if your employer contributes funds, those also count toward the maximum. If you exceed the maximum contribution limit, there is a penalty imposed by the IRS.

You will receive a debit card from Health Equity, the HSA plan vendor, to pay for qualified medical expenses using your HSA. And, if you have money in your HSA, the plan will automatically draw from your HSA funds to pay for eligible expenses before billing you for healthcare services and supplies.

Since the HSA is a personal bank account, the funds are yours to keep even if you change medical plans or leave employment with the City. Funds roll over from year-to-year, and you can use them for eligible healthcare expenses even into retirement.

Health Savings Accounts are triple-tax free. Setting aside a little money in an HSA now can pay off in a big way later.

It’s tax-free when it goes in. You can put money into your HSA on a before-tax basis through convenient payroll deductions. Not only do you save money on qualified healthcare expenses, but your taxable income is lowered.

It’s tax-free as it grows. You earn tax-free interest on your money. The interest you earn even earns interest.

It’s tax-free when you spend it. When you spend your HSA on qualified healthcare expenses, you don’t pay any taxes. That means you’re saving money on things like your medical, dental and vision coinsurance and deductibles.

To be eligible to contribute to an HSA, you must enroll in the Anthem BCBS HDHP or Kaiser HMO HDHP and remain continuously enrolled in that plan for the entire plan year. If you’re covered by a second medical plan, it also must be a high-deductible option for you to be eligible for an HSA. For example, if you’re also enrolled in your spouse’s coverage, that plan must be a high-deductible option, too.

You can’t contribute to an HSA if:

  • You’re enrolled in Medicare or a veteran’s medical plan (TRICARE).
  • You’re claimed as a dependent on someone else’s federal tax return.
  • You or your spouse currently participate (or previously participated within the current plan year) in a general purpose Health Care Flexible Spending Account (FSA).

Although you can enroll your children up to age 26 in your medical coverage, you can’t use money from your HSA to pay their healthcare expenses unless you claim them as dependents on your federal income taxes (generally children up to age 18 or under age 24 if they are full-time students).