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Health Savings Accounts (HSAs) for Retirees

The HSA part of Consumer Directed HealthSelectSM helps you save money so you’re prepared for out-of-pocket health expenses. It also helps you lower your income taxes, because you can save up to a certain amount tax-free each year. Every Consumer Directed HealthSelect participant who is eligible to open an HSA should open one. HSAs are like tax-free nest eggs for health care expenses.

  • You can use your HSA on qualified expenses, even if you change to a different health plan or change employers. The money stays with you.
  • If you are not enrolled in Medicare, you can make and/or get tax-free contributions to your HSA – up to a certain amount set by the Internal Revenue Service (IRS) each year.*
    • The State of Texas will contribute pre-tax dollars to your account every month, if you’re an eligible member.
    • As a retiree, you cannot have pre-tax contributions taken from your annuity checks before taxes, but you can make post-tax contributions directly to your account, and claim the contributions later on your tax return. (Please make sure your contributions plus any made by the State of Texas or someone else don’t go over the annual maximum set by the IRS.)
  • You have access only to the money that’s actually in your HSA. You won’t have access to any money that’s been pledged to be deposited in the future.
  • Any unused money in your HSA will carry over from one year to the next, so you won’t lose money in your account at the end of the year.
  • If you’re enrolled in Medicare, you cannot make or accept tax-free contributions to your HSA. If you had an HSA before you enrolled in Medicare, you can continue to use the money in your account, tax-free, for qualified health expenses.
    • Once you’re enrolled in Medicare, you can use money in your HSA for non-health-related expenses, but you’ll pay taxes on that money.

Visit the website for Optum Bank, administrator of Consumer Directed HealthSelect HSAs.

HSA Contributions and Limits* for 2018 (January 1 – December 31, 2018)

Description Individual account  Family account**
Annual maximum contribution (set by the IRS) $3,450 $6,900
Annual state contribution $540 ($45 monthly) $1,080 ($90 monthly)
Annual maximum participant contribution $2,910 $5,820

NOTE: Member who are 55 years or older can have an additional "catch-up" contribution of up to $1,000 per year, for both 2017 and 2018.

*HSA contributions and limits may change from year to year, or based on eligibility requirements and the participant’s age. Maximums are set by the IRS and include all contributions -- both pre-tax and post-tax -- to an HSA.
**Includes the member plus any number of dependents.