[UCRDBR] CORE is not Compatible with the Health Savings Account

[Departmental Benefits Representatives]

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November 7, 2023

To:
Department Benefits Representatives (DBRs)
From:
Central HR Benefits Office on behalf of UC Office of the President
Re:

CORE is not compatible with the Health Savings Account

DBRs, please share this important information with your department via your internal listserv.

Certain benefits of the CORE medical plan do not meet the requirements of an HSA-compatible high-deductible health plan as defined by IRS regulations; therefore, an individual enrolled in CORE is not eligible to have a Health Savings Account.  Only individuals with an IRS-qualified high deductible health plan, like the UC Health Savings Plan, may contribute to a Health Savings Account through payroll deductions or directly to HealthEquity.

As a reminder, UC employees who leave the Health Savings Plan cannot continue to contribute, or receive contributions, to their Health Savings Account.

Although individuals who change from the UC Health Savings Plan to another health plan cannot contribute or receive contributions to their HSAs, they can still use their HSA funds for eligible health care expenses. Please note that HSA accounts of members who remain in the Health Savings Plan are sponsored by UC and thus incur no fees, while HSAs of those who change to other plans become unsponsored individual accounts and will incur fees from HealthEquity.


*       Health Equity's administrative fee is waived for sponsored accounts as well as for unsponsored Health Savings Accounts with a cash balance of $2,500 or more.


*       A plan is not a High-Deductible Health Plan (HDHP) just because it has a high deductible; the IRS has additional regulations governing HDHPs.  For instance, with the exception of preventive care, the annual deductible must be met before plan benefits are paid. Under the CORE plan, the ambulance benefit (emergency or authorized transport) is not subject to the deductible, therefore the plan does not meet the IRS definition of a HDHP that can be paired with a Health Savings Account.



*       CORE is compatible with UC's general-purpose Health Flexible Spending Account<https://ucnet.universityofcalifornia.edu/compensation-and-benefits/other-benefits/flexible-spending-accounts/health-fsa.html> (FSA), which is a special account you put money into and used to pay for eligible out-of-pocket health care costs on a pre-tax basis.

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