Q: How does an HSA work?
A: The amount you contribute is generally not taxable. Funds in your HSA earn interest tax-free. This reduces your taxable income and, potentially, your tax liability. Consult your tax advisor to determine how your HSA affects your unique tax circumstances. When you use your HSA to pay for qualified medical expenses, you do not have to pay taxes on the funds you withdraw.

Q: What is an HSA-eligible health plan?
A: The IRS determines the requirements of an HSA-eligible health plan (please refer to the IRS Guidelines section for specifics); however, if you enroll through your employer, your employer determines your specific plan design based on those guidelines. Please check your benefit plan materials for your plan design.

Q: When can I contribute to my HSA?
A: You can begin contributing to your HSA as soon as you receive your account number from OptumHealth Bank. It is very important that you make your initial contribution as soon as your account is opened. Only medical expenses incurred after your HDHP effective date and after the date of your first contribution are considered eligible expenses.

Q: How much can I contribute to my HSA?
A: Please refer to the IRS Guidelines section for specifics.

Q: How do I make contributions to my HSA?
A:

• Contribute online when you have logged into your account at OptumHealthBank.com or myuhc.com
• By mailing a deposit with a Contribution/Deposit Form
• If your employer offers payroll deduction, have a set amount deducted from your paycheck

Q: How often can I contribute? Is there a limit as to how much I deposit with each contribution?
A: You can contribute as often or as much as you wish, as long as your total contribution does not exceed the limits specified by the Internal Revenue Service. HSA contribution limits are excludable (if made by your employer) or tax-deductible (if made by you) up to the statutory maximum amount for single or family coverage, as stated by the IRS. Please refer to the IRS Guidelines section for the amount you may contribute during the plan year.

Q: What if I have contributed the maximum annual amount and am no longer covered by an HSA-eligible annual deductible health plan?
A: If you are no longer covered by an HSA-eligible annual deductible health plan later in the year and have contributed the maximum annual amount, you will have to withdraw some of the contribution from the account.

Q: What is the best way for a family member or someone else to make a contribution for me?
A: That person should write a check payable to you, the HSA account holder. You fill out a Contribution/Deposit Form and write “family or friend contribution” under HSA Special Instructions. Then, attach the check to the form and mail it to OptumHealth Bank, P.O. Box 271629, Salt Lake City, UT, 84127-1629. Remember, the annual limits apply to all contributions.

Q: When can I start to use my HSA?
A: Once your account is open, a deposit has been made to your account and funds are available, you can start using your HSA. You are 100 percent vested as soon as the funds are deposited and you have total control over the funds. Keep in mind that if your employer also contributes to the account, they can determine how often they contribute – yearly, monthly or weekly. Check to see what their contribution schedule will be.

Q: What information will I receive about my HSA?
A: You have access to online monthly statements at OptumHealthBank.com to track account balance and activity. If you prefer to have statements mailed to your home, simply notify OptumHealth Bank. You can opt-out of electronic statements at OptumHealthBank.com or send your request to P.O. Box 271629, Salt Lake City, UT 84127-1629.

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Q: What does the monthly maintenance fee cover?
A: Your monthly maintenance fee covers use of your Health Savings Account Card, which you can use to pay charges directly. Your maintenance fee also covers Online Bill Payment. Remember, by using your Health Savings Account Card, you can avoid many of the additional fees associated with your HSA. OptumHealth Bank is required to disclose every fee associated with your account, even though you may never incur additional fees beyond your basic monthly maintenance fee. These fees are outlined in the HSA Schedule of Fees and Charges, included with your Welcome Kit from OptumHealth Bank.

Q: Can I invest my HSA funds?
A: Yes, once your cash balance reaches the account specified investment threshold.

Q: What if I already have an HSA?
A: If you have an HSA at OptumHealth Bank through the same employer who's providing your HSA-eligible annual deductible health plan for the new benefit year, you don't need to fill out another application.

If you have an HSA at OptumHealth Bank, but not through your current employer, you can maintain your HSA with OptumHealth Bank. You don’t need to fill out another application. As long as you have an HSA-eligible annual deductible health plan, you can continue to use your HSA. If you are no longer covered by an HSA-eligible annual deductible health plan, you can still keep your HSA, but you can’t make contributions.

If you have an HSA, but not with OptumHealth Bank, you can rollover or transfer your HSA to OptumHealth Bank. First, complete the OptumHealth Bank HSA application. Remember, your account must be opened at OptumHealth Bank before you can rollover or transfer funds.

Transfer: Contact the bank that has your existing HSA and ask them to transfer your funds directly to OptumHealth Bank.  You can also submit your transfer request form to OptumHealth Bank, and we will initiate the transfer with your existing bank.  This process may be repeated as needed.

Rollover: Download a Rollover/Transfer Request Form from OptumHealthHSA.com. Close your existing HSA and send the funds to OptumHealth Bank to roll into a new HSA.  You can only withdrawal HSA funds from one account and redeposit the HSA rollover funds in another account once per 12 month period.

Rollovers and transfers are subject to IRS restrictions. Please contact your tax advisor for information.

Q: What if my total contribution for the year exceeds the IRS limits?
A: Complete and mail or fax a Withdrawal/Distribution form located at OptumHealthBank.com.  If you request a refund, there is no penalty as long as the distribution is made before the tax filing deadline, generally April 15. Earnings on the excess amount are taxable; however the 6 percent excise tax will not apply as long as the excess contributions and earnings are paid out before the due date (including extensions) for filing your tax return. Consult the HSA Schedule of Fees and Charges for the fee associated with this transaction.

Q: How much tax will I have to pay on contributions over the IRS limit?
A: Excess contributions are subject to standard tax rates plus an additional 6 percent penalty.

Q: How much tax will I pay if I use my HSA funds for non-qualified expenses?
A: Any funds you withdraw from your HSA for non-qualified expenses will be taxed at your income tax rate plus 10 percent of the amount
paid.

Q: How do I report withdrawals that are used for non-eligible
expenses?
A: You must report distributions for ineligible expenses. Consult your tax advisor for specifics.

Q: What information do I need to keep when I withdraw funds?
A: Save all receipts and records of withdrawals for tax reporting to the IRS. If you use your funds for non-health related expenses, you must report those withdrawals. You are responsible for maintaining all records associated with your HSA--not your employer.

Q: What happens if I withdraw too much and don't spend it on qualified medical expenses?
A: If you use your HSA funds for anything other than a qualified health care expense as defined in IRS Publication 502, the amount withdrawn is subject to both income tax and a 10 percent penalty, unless you are over age 65. If you are 65 or older, the amount you withdraw for non-medical purposes is treated as retirement income, and is subject to normal income tax, but not subject to the 10 percent penalty.

Q: Can I return funds to my HSA if I withdraw them by mistake?
A: Withdrawals made for what you thought were qualified medical expenses, but turned out not to be, can be returned to your HSA if you made the withdrawal in error. Complete and mail or fax a Withdrawal Correction Form, available at OptumHealthBank.com, on or before April 15 following the year in which you mistakenly withdrew funds. Consult the HSA Schedule of Fees and Charges for the fee associated with this transaction.

Q: What happens to my HSA if I leave my employer?
A: All funds in your HSA, including funds contributed by your employer, are yours to keep. You can:

• Keep your HSA at OptumHealth Bank
• Transfer your funds to another qualifying HSA within 60 days of withdrawing the funds from OptumHealth Bank to avoid taxes and an additional 10 percent penalty.

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Q: What if I am no longer covered by an HSA-eligible annual deductible health plan?
A: If you are no longer covered by an HSA-eligible annual deductible health plan, you cannot continue to contribute; however, the money in your HSA is yours to keep at OptumHealth Bank or transfer to another qualifying account. If you choose to transfer your HSA to another qualifying account, you must do so within 60 days of withdrawing the funds from OptumHealth Bank to avoid taxes and an additional 10 percent penalty.

Q: What are catch-up contributions?
A: Generally, when you reach age 55, up to when you are enrolled in Medicare, you can make additional contributions to your HSA to maximize your tax advantages and set aside the money you need. Assuming you are in an HSA-eligible annual deductible health plan for the full year, the year that you turn 55, you are eligible for the full amount of the catch-up contribution. Please refer to the IRS Guidelines section for exact dollar amounts.

Q: Once I am eligible, how can I make catch-up contributions — all at once or over time?
A: Either method is fine — a one-time contribution or several contributions over time. For specifics, refer to the IRS Guidelines section or consult a tax advisor.

Q: Can people aged 65 or older withdraw funds for any reason without a penalty?
A: For those aged 65 or older, whether enrolled in Medicare or not, there is no penalty for withdrawing funds.  As always, normal income taxes apply if the distribution is not used for unreimbursed medical expenses (expenses not covered by the medical plan).

Q: A person accumulates $5,000 in an HSA. Three years later, the person has a plan (not an HSA-eligible annual deductible health plan) and is married. Can the spouse use funds out of the HSA for expenses not covered by the health plan?
A: Yes. HSA funds can be removed tax-free for eligible medical expenses for a tax dependent at any time, regardless of whether either person is enrolled in an HSA-eligible annual deductible health plan. Remember: If you are no longer covered by an HSA-eligible health plan, you cannot continue to contribute to your HSA.

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FAQs About HSA Investment Capabilities

Q. What features distinguish OptumHealth Bank’s HSA Investment Portfolio?
A. Features include:

• Quality – Funds are well established
• Diversity – Multiple fund types provide a tailored approach to meet your growth objectives and risk tolerance
• Flexibility – You can easily transfer assets between your HSA deposit account and mutual fund investments
• Non-Proprietary – Unlike most competitors, we can consider and include multiple fund groups in our standard offering
• Consumer-Directed – Investment options are easy to use and understand, and are accessible online or by automated voice response when using a telephone key pad

Q. What criteria were used to select the funds for this portfolio?
A. OptumHealth Bank selected from a number of funds chosen by a Registered Investment Advisor (RIA). Decision criteria included:

• Variety in investment options to represent multiple fund companies
• Mutual funds with high value as defined by expense ratio, as well as historic performance
• Mutual funds which represent various risk tolerances

Q. Are there any criteria an OptumHealth Bank account holder must meet before they are eligible to invest HSA assets in mutual funds?
A. You must maintain a minimum available balance in your HSA that exceeds your minimum investment threshold before you can make investments.  Investments can be made in $100 increments.  Refer to your schedule of fees in order to determine the Investment Threshold that applies to your account.

Q. What happens if an OptumHealth Bank HSA deposit account balance dips below its minimum investment threshold?
A. While the HSA deposit account has no minimum balance requirements, account holders are not eligible to invest money from their OptumHealth Bank HSA deposit account into mutual funds unless the deposit account has a balance that exceeds the minimum investment threshold.

Q. What are the key benefits to account holders if they participate in OptumHealth Bank’s HSA mutual fund investments?
A. Key benefits include:

• Auto-Enrollment – If they have an active OptumHealth Bank HSA deposit account, account holders are automatically set up to begin investing as long as they meet the minimum balance requirement for investments. No additional enrollment form or personal information is needed.
• Low Minimum Balance – An account holder need only maintain a balance that exceeds their minimum investment threshold in their deposit account at OptumHealth Bank in order to be eligible to purchase mutual funds.
• Easy Access – If account holders have an OptumHealth Bank HSA with a UnitedHealthcare® HSA-eligible health plan, they can visit myuhc.com or access our automated voice response service by dialing 1-800-791-9361 from a telephone key pad. All other OptumHealth Bank account holders can log onto OptumHealthBank.com or call 1-866-234-8913 for information about HSA investments.
• Automatic Invest Option – Account holders may set up an automated recurring mutual fund purchase whenever their account balance reaches its investment threshold (established by the account holder in advance). If account holders do not want to automate purchases, manual orders can be initiated online or by phone at any time.
• Integrated Statements – Account holders can view their HSA deposit account balance and any HSA investment fund balances in one convenient online location.

Q. What is the difference between my OptumHealth Bank HSA deposit account and the HSA investment account?
A.

• HSA Deposit Account – This is an interest-bearing account with traditional account access tools (e.g. debit card). This account will accept all new HSA-eligible deposits and withdrawals, and must be in place prior to investing. Assets held in the HSA deposit account are FDIC insured up
  to $100,000.
• HSA Investment Account – This account allows you to place buy and sell orders for mutual funds, and is not FDIC insured. The mutual funds are not guaranteed by OptumHealth Bank and may lose value.

Q. Will OptumHealth Bank’s mutual fund portfolio ever change?
A. Based on the analysis and work of the Registered Investment Advisor, in conjunction with OptumHealth Financial Services’ investment committee, we believe these funds are appropriate for the intentions of the HSA investor. OptumHealth Financial Services’ investment committee will review funds on a quarterly basis and make adjustments to the portfolio, as needed.

Q. Will I be notified when a fund in the portfolio has changed?
A. Yes. We will notify you whenever a fund has been added or dropped from the portfolio.

Q. Are there any fees associated with the mutual fund investment portfolio?
A. Currently, OptumHealth Bank’s investment capabilities are available to HSA account holders at no additional charge. There are no investment account maintenance fees, no fees assessed to buy mutual funds, and, typically, no redemption fees to sell mutual fund assets.

Note: Mutual fund families have the right to assess short-term redemption fees based on the timing of buy and sell orders for specific funds. (Standard HSA deposit account fees still do apply.)

Q. Are the monies invested in mutual funds FDIC insured?
A. No. Mutual funds are not insured by the FDIC, not guaranteed by OptumHealth Bank, and may lose value. As an account holder, you are reminded to invest at your own risk.

Q. Can my employer’s contributions to my HSA be deposited directly into mutual funds?
A. No. Only your FDIC insured deposit account at OptumHealth Bank can accept new HSA-eligible deposits. As the account holder, you are the only party allowed to initiate mutual fund transactions.

Q. Can assets held in mutual funds be used to pay for my eligible HSA claims?
A. HSA assets invested in mutual funds cannot be directly accessed to cover medical claims. If you wish to use mutual funds to pay for a claim, you must first sell shares of the fund and then transfer the proceeds into your HSA deposit account at OptumHealth Bank. It is important to note that assets invested in mutual funds will not be automatically sold and transferred back into your HSA deposit account. Only you, the account holder, can initiate an order to sell mutual fund shares.

Q. Are assets that have been transferred between my mutual funds and my HSA deposit account available immediately?
A. Orders to buy and sell mutual funds may take up to three business days to execute or settle. As the account holder, you must take this time into consideration when selling mutual funds to cover expected HSA claims.

Q. Can money from my HSA deposit account be automatically invested to purchase more mutual fund shares?
A. Yes. You can establish an Automatic Invest Option – an auto-transfer of assets from your OptumHealth Bank HSA deposit account into one or more mutual funds – each time a pre-established balance threshold is met. For example:

• Your HSA deposit account balance is currently $1,900.
• You can activate the Automatic Invest Option by establishing a dollar balance threshold. In this example, let’s assume you select $2,200.
• You make a $600 contribution to your HSA deposit account, bringing the available balance to $2,500.
• Since the balance is now above the Automatic Invest Option threshold you established, a $300 mutual fund purchase is automatically executed.
• You now have a balance of $2,200 remaining in your HSA deposit account.

Subsequent automatic fund purchases are suspended until your balance again rises to at least $100 above the $2,200 threshold you established, at which time another fund purchase will execute.

Note: Any time you execute a trade to sell shares, the Automatic Invest Option capability is suspended for a 10-day period. During this time, you can still initiate transactions manually, if desired.

Q. Is there a limit to the number of times I can execute an order to buy or sell mutual funds?
A. You are limited to only one mutual fund “buy” transaction during a 24-hour period. There is no limit to the number of times you can sell or transfer assets from mutual funds into your HSA deposit account. However, any time you execute an order to sell funds, any automatic fund “buys” you established are suspended for a 10-day period. During this time, you can still initiate “buy” transactions manually, if you desire.

Q. When I decide to sell mutual funds, can I sell a specific dollar amount or percentage of shares?
A. You can sell 100 percent of your assets from a fund if you perform a percent sell. However, if you perform a dollar sell to liquidate your assets, you may only sell 90 percent of your assets to accommodate any price fluctuations between the time the sell transaction is initiated and when it settles.

Q. Can OptumHealth Bank Customer Service Representatives initiate mutual fund buy or sell transactions on my behalf or provide investment advice?
A. No, these representatives are not permitted to address specific questions about the funds or provide any investment advice. Only you, the account holder, can initiate mutual fund transactions. If you have a UnitedHealthcare health plan, you can access additional information on HSA investments by visiting myuhc.com. All other account holders should log onto OptumHealthBank.com for more details. OptumHealth Bank account holders may also directly access the mutual fund Web sites or call the fund companies for more information.

For a printable version of this document please download.
HSA Investments FAQs (50 KB)

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