If you are considering enrolling in a Consumer Directed Health Plan (CDHP) for 2021, here are a few things to take into consideration:
- CDHPs have low monthly premiums, offset by a higher annual deductible and out-of-pocket maximum. These plans are automatically paired with a Health Savings Account (HSA), into which WSU will contribute $58.34 for an individual or $116.67 for a family each month ($700.08/$1400.04 annually). You may also elect to make your own contributions to this account through pre-tax payroll deduction.
- The maximum amount that can be contributed into an HSA for 2021 is $3600 for individuals and $7200 for families. This amount includes both employer and employee contributions, as well as the SmartHealth $125 Wellness Incentive, if applicable. Employees ages 55 or older may contribute up to an additional $1,000 annually.
- The HSA funds are available to help pay for IRS-qualified out-of-pocket medical expenses, and carry forward year-to-year. They remain your funds even if you dis-enroll from a CDHP, leave your job, or retire.
- To enroll in a CDHP, you must meet the IRS eligibility requirements. If you are nearing age 65, we recommend you consider if a CHDP with the HSA may work for you, since the IRC states individuals enrolled in Medicare may not also contribute to an HSA. Speaking with a tax advisor before enrolling in a CDHP may be advantageous.
- If you are enrolled in a Flexible Spending Arrangement (FSA) for 2020 and are switching to a CDHP/HSA plan for 2021, your FSA account must be at a zero balance by December 31, 2020. Failure to do so would delay contributions to your HSA account until April 2021.
More information about the CDHP with HSA can be found on the HSA info page.
Questions can be directed to HRS Benefit Services at (509) 335-4521 or hrs.benefits@wsu.edu.
