Benefits Handbook

In general, you contribute to your Health Savings Account with before-tax dollars. This means that the money is deducted from your pay before federal, Social Security and most state and local income taxes are withheld.

By contributing on a before-tax basis, you reduce your taxable pay, and as a result, you lower the amount of taxes you pay.

If you are age 55 and above and elect to make catch-up contributions, your contributions are made with before-tax dollars.

Note: Your before-tax contributions cease while you are on unpaid leave. If you return to active employment in the same calendar year, your before-tax contributions will resume. The amount of your before-tax contributions will be recalculated for the remainder of the year to "catch-up" for your missed contributions while on unpaid leave. The balance of your annual election will be divided by your remaining pay dates, spreading the balance over the rest of your paychecks through the end of the year. This will increase your per pay period contribution upon return from unpaid leave.

While you are on an authorized unpaid leave of absence, you may continue to contribute to your Health Savings Account if you meet all the eligibility criteria, including not being enrolled in any Medicare benefit on an after-tax basis by making a contribution to your Health Savings Account via the Spending Account Service Center. If you made after-tax contributions to your Health Savings Account during your authorized unpaid leave of absence, those contributions will not be considered when your payroll contributions are automatically adjusted. It is your responsibility to make sure that your total contributions do no exceed the total annual on Health Savings Account contributions.

None. Your annual base salary will be used to calculate salary-related benefits.

Making before-tax contributions to your Health Savings Account means that the amount you contribute toward your Health Savings Account is determined before taxes are withheld, so you are paying taxes on a lower amount of salary. Your take-home pay is higher than it would be if you paid for your coverage on an after-tax basis.

Depending on your salary, your Social Security benefits may be lower. This is because your Social Security is based on your taxable pay (up to a specified annual maximum amount of earnings), and your taxable pay is reduced by the amount you contribute to the Health Savings Account.

Your contributions won't be included in your taxable gross earnings on your W–2 statement. This reduces your taxable pay for federal purposes and as a result, lowers the amount of federal taxes your pay.

No. If you receive tax-free withdrawals from the Health Savings Account, you cannot claim those expenses as a deduction on your federal income tax return. You can, however, claim any after-tax contributions, such as contributions made while on an unpaid leave of absence, as a deduction on your federal income tax return.

No. The 20% additional tax that generally applies if a withdrawal is not used for qualified medical expenses does not apply when you are disabled. However, the amount of the withdrawal will be included in your taxable income and subject to federal, state and local taxes as applicable.

No. The 20% additional tax that generally applies if a withdrawal is not used for qualified medical expenses does not apply when you are at least age 65. However, the amount of the withdrawal will be included in your taxable income and subject to federal, state and local taxes as applicable.