health savings account (HSA)
A health savings account — or HSA — is like a savings plan for your health care.
A health savings account — or HSA — is like a savings plan for your health care. An HSA is a personal account separate from your Chevron benefits. It works like a regular bank account, but you don’t currently pay federal income taxes on money you deposit. And when you use the money in your account to pay for qualified medical expenses, under current IRS rules, you won’t pay federal income taxes on the money, either.
Unlike the Health Care Spending Account (HCSA), your savings grow from year to year. There is no use it or lose it rule. And you can take your money with you if you change plans or when you leave Chevron. You can use an HSA to pay for qualified medical expenses this year or at any point in the future — even in retirement.
There a lot of rules about who can open and contribute to an HSA, how it’s used, and how taxes work. This page provides only basic information to help you understand how HSAs work in general. It’s your responsibility to understand the complete rules and take action if you decide an HSA is right for you. Chevron does not provide an HSA, and Chevron cannot offer counsel about HSAs.
you own it. you take it with you.
An HSA is a personal account separate from your Chevron benefits. You are responsible for making contributions, and likewise the money you contribute belongs to you. Deposits can be made at any time and the money is available upon deposit for you to spend. You keep your money, even if you change jobs or medical plans. You must be enrolled in a qualifying high deductible health plan — such as the Chevron High Deductible Health Plan (HDHP) or HDHP Basic — to open and contribute to an HSA. However, you can still use your established HSA to pay for qualified medical expenses regardless of what medical plan you’re participating in at the time.
it’s not just for doctor visits.
You can use your HSA to pay for qualified medical expenses, like your HDHP or HDHP Basic deductible, coinsurance payments, prescription drugs, dental care, vision care and mental health or substance abuse services. You can also use the money to pay for the qualified medical expenses of your tax qualified dependents, whether or not they are enrolled in the HDHP or HDHP Basic. You can’t use your HSA to pay the monthly premiums on your health coverage right now, but later you can use it to pay for your Medicare premiums, out-of-pocket expenses and even eligible long-term care premiums.
- Read IRS Publication 502 to learn more about what’s considered a qualified medical expense.
spend it now or save it for the future.
Save now, and you could possibly have a nest egg for qualified medical expenses when you retire. Because you control your account and the money is yours to keep, you choose when you spend the funds. If you’ve got enough in your household budget to cover minor medical expenses today, you don’t need to use the funds in your HSA. You can simply let the money grow and save it when for when you need more help due to an illness, accident or when you’re on a fixed income in retirement.
there might be tax advantages.
Money deposited into an HSA is currently federal income tax free. If you withdraw money to pay for qualified medical expenses, those withdrawals are currently federal income tax free. There are some states, including California, that do not follow the federal tax rules and tax HSA contributions and earnings. You’re encouraged to talk to your tax advisor to understand the potential consequences of an HSA before you make final decisions. You should know that you can be subject to interest and penalties if you contribute over the annual limit allowed by the IRS, or if you use the money on an expense that is not a qualified medical expense — like a big screen T.V. or a vacation.
With those federal tax advantages come some pretty strict rules from the IRS about who can open and contribute to an HSA.
- You must be enrolled in an HSA-compatible plan. Good news, the Chevron HDHP and HDHP Basic are HSA-compatible plans. If you’re eligible for and enroll in the HDHP or HDHP Basic, you may be eligible to open and contribute to an HSA for as long as you remain eligible under the IRS rules.
- You are covered by no other health coverage, unless it’s an allowed plan, such as another high deductible plan, a dental plan, or a vision plan.
- You are not enrolled in or covered by a health flexible spending account or an HRA. This means you can’t be enrolled in Chevron's Health Care Spending Account (HCSA). Participation in Chevron’s Dependent Day Care Spending Account (DCSA), another kind of flexible spending account, is still okay. It also means your spouse, if applicable, cannot be enrolled in a flexible spending account or HRA that could reimburse your expenses.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on someone else’s tax return.
There are other rules and restrictions, and it’s up to you to understand them to ensure you’re eligible to open and contribute to an account. You should consult your tax advisor and read the full eligibility requirements in IRS Publication 969.
it works like a bank account
It’s important to remember your HSA works like a bank account — with some extra rules tacked onto it. You can pay for qualified medical expenses only if you have enough money in your HSA to cover the cost. Like a bank account, only the money you’ve actually contributed is available to you. So even if you plan to contribute $1,000 for the year, if you only have $300 in your HSA at the time, that’s all you can spend until the balance grows larger. If you don’t have enough money in your HSA to cover a qualified medical expense, you’ll need to pay the balance from your own pocket. But you can pay yourself back later, when you have more money in your HSA. And there’s no time limit for reimbursement if it’s for a qualified medical expense.
Unlike a flexible spending account, there is no use it or lose it rule, and you don’t have to send in receipts or a claim form that has to be approved before you can be reimbursed. For this reason you can reimburse yourself two weeks later or two years later. But don’t forget to hold onto the receipt and other documentation to prove to the IRS the withdrawal was permissible under their rules. What matters is that the expense occurred on or after the date the HSA was established and the expense was a qualified medical expense.
- Read IRS Publication 502 to learn more about what’s considered a qualified medical expense.
several ways to pay for expenses
Since your HSA is a bank account, the methods of payment available to you are similar. Keep in mind this list will vary depending on the HSA financial institution you choose, but they generally include the following options:
- A debit card. You can typically use the debit card at a pharmacy, doctor’s office or other locations that meet the government’s IIAS requirements. You are usually able to order extra cards for your dependents, too.
- Write a check. If you can’t use your debit card, many HSAs will allow you to order checks for an additional fee, and you can simply write a check to the provider, or even to yourself.
- Use online bill pay. Some, but not all, financial institutions will allow you to pay online on their website to your provider (and sometimes to yourself).
- Pay out of your own pocket. You can pay for the expense yourself and later pay yourself back using a check, cash or online payment, depending on your financial institution.
keep all your receipts.
Save all your receipts for a qualified medical expense. If the IRS asks, you must be able to prove you used your HSA money only to pay or reimburse yourself for a qualified medical expense (and not for example, that big screen T.V. or a vacation). Read IRS Publication 502 to learn more about what’s considered a qualified medical expense.
Participating in an HSA is voluntary. If you meet the IRS eligibility requirements to open and contribute to an HSA, you can choose an HSA with any financial institution that offers them. The Chevron Federal Credit Union and many other financial institutions offer HSA products. Chevron does not provide an HSA, and Chevron cannot offer counsel about HSAs.
When you open an HSA, know that typically the effective date will be pending until you complete the account’s enrollment requirements. This is important to know because you can only use your account to pay for eligible expenses that occur on or after your HSA effective date.
There a lot of IRS rules about who can open and contribute to an HSA, how it’s used, and how taxes work. You are responsible for understanding the IRS eligibility rules and determining if you meet the requirements to participate in an HSA. You are also responsible for making contributions, staying within the IRS annual contribution limits, and using the money on only qualified medical expenses. Talk to your tax advisor and consult these IRS publications for more rules:
If you open an HSA with another financial institution, you'll be responsible for making contributions on your own because payroll deduction won't be available. But eligible employees enrolled in Chevron's HDHP or HDHP Basic may be able to make contributions to the BenefitWallet Health Savings Account (HSA) with the convenience of payroll deductions. This HSA is separate from your Chevron benefits. Chevron does not provide an HSA, and Chevron cannot offer counsel about HSAs.
You can open a BenefitWallet HSA from the Benefits Connection website after you're enrolled in the Chevron HDHP or HDHP Basic. You're still responsible for making sure you are eligible to open and contribute to an HSA because Benefits Connection does not determine your eligibility for an HSA beyond meeting the requirement to be enrolled in the Chevron HDHP.
If eligible, you can open a new BenefitWallet HSA during open enrollment or at any time during the year, as long as you aren't enrolled in the Health Care Spending Account (HCSA). You can change, stop or start contributions to your existing BenefitWallet account at any time from Benefits Connection or by calling the HR Service Center. And you can take your money with you if you change medical plans or you leave Chevron.
When you open the BenefitWallet HSA, know that typically the effective date will be pending until you complete the account's enrollment requirements. This is important to know because you can only use your account to pay for eligible expenses that occur on or after your HSA effective date. Learn more about the BenefitWallet HSA:
Important: If you are enrolled in the Health Care Spending Account (HCSA), you cannot open or contribute to the BenefitWallet health savings account (HSA). This means that if you change to the High Deductible Health Plan (HDHP) or HDHP Basic mid-year due to a qualifying life event, or if you leave an expatriate assignment and want to enroll in the High Deductible Health Plan (HDHP) or HDHP Basic, you cannot open and contribute to the BenefitWallet HSA if you have already elected to enroll in the HCSA for the current year.
Chevron will also contribute to your HSA in 2018. To help you build your HSA account more quickly from the start, Chevron will prefund either $500, $750 or $1,000 to the BenefitWallet HSA for eligible employees who are enrolled in either the Chevron HDHP or Chevron HDHP Basic in 2018. If you want to take advantage of this opportunity, you'll need to take action during the upcoming open enrollment period – October 16 through October 27, 2017. Read the details.
*Eligible new employees hired or rehired on or after July 1, 2018 will receive half the applicable Chevron HSA contribution for 2018.
You’re still responsible for making sure you are eligible to open and contribute to an HSA. Benefits Connection – the enrollment website – does not determine your eligibility for an HSA beyond meeting the requirement to be enrolled in the Chevron HDHP or HDHP Basic. You should consult your tax advisor and read the full eligibility requirements in IRS Publication 969.
Please note: This page applies to U.S.-payroll employees. This page provides only certain highlights of benefits or program provisions. It is not intended to be a complete explanation. If there are any discrepancies between this communication and legal plan documents, the legal documents will prevail to the extent permitted by law. This is not a plan text or a summary plan description. There are no vested rights with respect to Chevron health care plans or any company contributions toward the cost of such health care plans. Rather, Chevron Corporation reserves all rights, for any reason and at any time, to amend, change or terminate these plans or to change or eliminate the company contribution toward the cost of such plans. Such amendments, changes, terminations or eliminations may be applicable without regard to whether someone previously terminated employment with Chevron or previously was subject to a grandfathering provision. Some benefit plans and policies described in this document may be subject to collective bargaining and, therefore, may not apply to union represented employees.