Health Savings Account (HSA)
A Health Savings Account (HSA) is an individually-owned, tax-free, interest-bearing savings account that is used to pay for qualified medical expenses either now or in the future. To be eligible for an HSA, you must participate in a high deductible health plan (HDHP). HSA contributions can be made by you, your employer, or both.
HSA contributions can be used to pay for qualified medical expenses for you, your spouse, or your dependent(s)—even if your dependents are not covered by the HDHP.
The HSA has a triple tax advantage with pre-tax contributions, tax-free growth and tax-free distributions.*
Eligibility to Contribute
- Must be enrolled in a high deductible health plan (Anthem HDHP or Kaiser HDHP)
- Must not be enrolled in Medicaid or Medicare (including Social Security Retirement benefits)
- Must not be enrolled in another medical plan that is not a high deductible health plan
- You or a spouse must not be contributing to a Healthcare FSA
- You cannot be claimed as a tax dependent on someone else's tax return
If you’re enrolled in the Anthem HDHP or Kaiser HDHP plans, and haven’t opened an HSA yet, visit Workday to make your election. You may change your contribution amount anytime throughout the year.
2024 Contribution Limits
The total amount you and Western Digital can contribute to your HSA this year is:
- $4,150 for Individual medical coverage
- $8,300 for Employee plus one or more medical coverage
- $1,000 to these limits if you're age 55 or older
Western Digital Contributions
Western Digital also contributes to eligible employee’s Health Savings Accounts, so if you elect an HSA eligible medical plan and elect to contribute to a Health Savings Account, you’ll receive the employer contribution. You can elect to contribute as little as $0.00 in Workday and still receive the employer contribution. If no HSA contribution is elected in Workday, then you will not receive the employer contribution. The employer contribution is prorated based on the date you elect to contribute in Workday and paid on a per pay period basis. Starting Jan 1 2023, the contribution will be made to your HSA account on a per pay period basis.
From January 1, 2024 – December 31, 2024 Western Digital contributions will amount to:
- Individual: $800
- Family: $1,800
Managing Your Funds
You own your HSA, so unlike the FSA, funds never expire and the entire balance is there for you year after year. You can build your funds for future health care expenses, and invest your money once it reaches a minimum balance of $1,000. This gives you the potential for tax-free earnings and a way to plan ahead for your medical costs in retirement.
*Money in an HSA can be withdrawn tax free as long as it is used to pay for qualified health-related expenses. If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn, plus a 20% penalty tax if you withdraw the money before age 65.