Understanding Consumer Directed Health Plans (CDHP) with Health Savings Accounts (HSA)

CDHPs have lower monthly premiums, offset by a higher deductible and out-of-pocket max. These plans are paired with a HSA, into which WSU contributes $58.34/EE only or $116.67/family monthly. You may make additional HSA contributions pre-tax through payroll deduction.

• The HSA max contribution limit for 2025 is $4,300/EE only or $8,550/families. This includes ER and EE contributions, and the $125 SmartHealth Incentive, if earned.
• EEs ages 55 or older may contribute up to an additional $1000/year.
• HSA funds can be used on IRS-qualified out-of-pocket medical expenses, and carry forward year-to-year. Funds remain yours even if you dis-enroll from a CDHP or leave WSU.
• Contributions made through payroll deduction lower your federal and FICA taxable income. Contributions made directly to HealthEquity can be reported on your income tax return to reduce federal/state income taxes, but not FICA taxes.
• HSA contributions are tax-free, the earnings are tax-free, and the funds remain tax-free if utilized for eligible health expenses.
• CDHP enrollees must meet IRS eligibility requirements. If near or over age 65, consider speaking with a tax advisor; Medicare enrollees may not also contribute to a HSA, and if they do there are tax implications.
• During OE, CDHP/HSA enrollees may also enroll in a Limited FSA to cover eligible vision and dental expenses in 2025.

Visit HSA info or HRS Open Enrollment for more information.

HRS Benefits: 509-335-4521, [email protected].