GUIDE TO YOUR
Take healthcare matters into your own hands.
When you’re enrolled in a High-Deductible Health Plan (HDHP), save more by taking
advantage of a Health Savings Account (HSA), which lets you use tax-free dollars to
pay for medical expenses.
This combination gives you ultimate control over how you spend your healthcare dollars.
Start with an HDHP
HDHPs o�er protection from catastrophic
or major medical expenses. These plans
have a cap on how much you pay out of
pocket and many fully cover preventive
services to keep you healthy. HDHPs
are relatively inexpensive compared to
Add an HSA
When you have an HDHP, you can set
aside money in a tax-free account to
pay your out-of-pocket costs.
Once you meet your deductible, your
health plan kicks in. Any money lef� over
in your HSA remains yours, allowing you
to grow your funds over time.
HSAs resemble individual retirement accounts.
Think of an HSA as a medical IRA. The similarities include:
• Deposits are tax-free and your money
• You decide how to invest and grow
• You can withdraw funds for qualified
medical expenses anytime, tax-free.
• When you reach age 65, you can
withdraw your money without penalty
and use it for whatever you want.
Get started today. It’s a great perk from
your employer, and it’ll save you money.
Once you determine that an HSA fits your needs, enroll through your
employer. Once you are enrolled, log in to your Discovery Benefits
consumer portal and agree to the online HSA agreements. Discovery
Benefits simplifies the process into four easy steps:
Health Savings Account
Contribute tax-free • Grow your funds tax-free • Spend tax-free
Benefits of an HSA
• You choose how much to set aside for healthcare
expenses, up to the IRS maximum. Currently at:
• $3,400 for single HDHP coverage*
• $6,750 for family HDHP coverage*
• $3,450 for single HDHP coverage*
• $6,900 for family HDHP coverage*
• It reduces taxable income — Deposits are taken out of
your paycheck before income tax is calculated, and
withdrawals for qualified medical expenses are tax-free
if an HSA is o�ered through your employer’s benefits
• It grows with you — The money in the account is yours
to invest, and the earnings are tax-free.
• Your employer may contribute to your HSA.
• It covers a wide variety of medical expenses not typically
covered by traditional insurance.
• Your HSA is portable if you change jobs.
• Your HSA allows you to shop for care.
• From age 55 until you enroll in Medicare, you can
contribute an additional $1,000 annually.
• At age 65, you can use your HSA funds however
you choose. It’s counted as income and taxed as
such, but there’s no penalty.
• Once covered by Medicare, you can no longer
contribute, but you can continue to withdraw available
funds from your HSA.
Is this right for me?
Things to consider when choosing an HSA:
• Your anticipated healthcare expenses.
• How active you want to be in your healthcare spending.
• Your personal financial situation.
• If enrolled in other coverage through a spouse, you
may be ineligible for an HSA.
• A conversation with your tax advisor can help you decide.
To be eligible for an HSA, you must:
• First enroll in a High-Deductible Health Plan
You are not eligible for an HSA if:
• You are claimed as a dependent on someone else’s
• You are covered by another plan that conflicts
with the HDHP such as Medicare, a Flexible
Spending Account or select Health Reimbursement
• Your spouse is contributing to a full Health FSA.
*The IRS adjusts these amounts annually. The most current information is online at www.DiscoveryBenefits.com.
1. Deposit money into your HSA
2. Manage your funds
3. Spend on eligible expenses
4. Collect your money
Your contributions are tax-free
Three ways to make contributions:
1. Pre-tax salary deductions — If your employer o�ers this benefit, your
payroll deductions are exempt from most state FICA and FUTA taxes as well
as federal income tax (Most states allow this, but not all. Check with your
2. Employer contributions — Made directly to your HSA by your employer.
3. Direct contributions — Throughout the year on your own schedule. Your annual
contributions are taken as a deduction on your tax return (no need to itemize).
Tax tips for your Discovery Benefits HSA
HSAs are governed by the IRS. These tips will help you get the most tax advantages from your funds.
If you contribute too much…
• Simply remove the excess contributions and any income
you’ve earned from those contributions before your tax
return deadline (usually April 15).
• Ask your tax advisor to help you monitor your
contributions so you stay within the IRS limits.
• If you forget, the excess contributions are taxed at 6%
each year they remain in the account.
If you contribute the annual maximum…
• Be sure to remain HSA-eligible for the following
• If your eligibility status changes in the following 12-month
period, make sure you budget for taxes and a 20%
penalty for the months you are ineligible.
• You’re free to contribute to more than one HSA for
yourself, just be sure the total amount of all HSA
contributions is within the annual limit.
If you split contributions with a spouse…
• You can divide the contributions however you like,
equally or otherwise.
If you are turning 55…
• Once you turn 55, you can make an additional catch-up
contribution each year.
• If you and your spouse are both making catch-up
contributions, be sure to open a second HSA for his/her
catch-up contribution (IRS allows one catch-up
contribution per HSA per year).
• Once you’re covered by Medicare, you stop making
contributions to your HSA, but you can still use any funds
you have available.
If you contribute for individuals who are non-eligible…
• Just remove the ineligible contributions and attributable
earnings from your HSA. The IRS allows you ample time
to do so.
• If you forget, the excess funds and their earnings are
taxed at 6% each year they remain in the account.
If you’re starting late in the year…
• Set up your HSA no later than December 1. Contributions
can be made right up until your tax return date (usually
April 15 for those who pay taxes by the calendar year).
Keep in mind that you’ll need to remain HSA-eligible for
the following 12 months.
• Once you enroll in an HDHP, you
can start HSA contributions the
first of the next month.
• You may contribute up to the IRS
maximum as long as you open
your HSA by December 1 and
remain eligible for the following
Note: Once your account is established, you must log in to your online account at
www.DiscoveryBenefits.com and sign o� on your terms and conditions.
Not sure how much to save?
Use the HSA Calculator at www.DiscoveryBenefits.com/HSAcalculator to
determine how much you should set aside for qualified expenses.
Grow your funds in interest
Access funds for short-term healthcare needs while you grow funds
for long-term security. Your HSA contributions can go into one of three
1. Cash account (default account)
Your funds start out in an interest-bearing, FDIC-insured
cash account. There is no minimum deposit required for
opening an HSA. Once your contributions reach $1,000,
you have additional choices.
2. Interest-bearing account
Af�er you have $1,000 in your cash account, excess funds
can be transferred, in $100 increments, into an interest-
bearing, FDIC-insured account. Funds are automatically
transferred between the cash and interest-bearing accounts
as cash account fund levels increase or decrease. Interest
rates are variable.
3. Mutual funds
This is where your investing flexibility becomes a reality. At
any time, you may invest funds from your interest bearing
account in a wide variety of mutual fund options. Those
options can be viewed online in the HSA section at
Mutual fund shares may be automatically sold to bring
the cash account balance to the minimum threshold of
$1,000, when necessary. As with any mutual fund, your
HSA investments are not FDIC insured and are made at
your own risk. They are not guaranteed by Discovery
Benefits or the fund custodian, HealthcareBank, and may
Flexibility allows for family changes.
Designate a beneficiary.
As you would with an IRA, you will name a beneficiary when
you enroll in an HSA. If you name your spouse, your HSA will
become his/hers in the event of your death. If you choose
someone other than your spouse, the account stops being
an HSA and the fair market value of the account becomes
taxable to your beneficiary. If you don’t designate a
beneficiary, the fair market value of the account will be added
to your last income tax and estate tax return. You can change
your beneficiary at any time.
Adjust for marriage and family changes.
• If your HDHP coverage changes from single to family
coverage, you may increase your contribution on a
• If your HDHP coverage changes from family to single
coverage, you may adjust the contribution on a prorated
basis to ensure you do not contribute more than allowed.
• In the case of a divorce or separation agreement, a
transfer to your spouse or former spouse is not taxable as
long as it’s maintained as an HSA.
Rollovers and transfers from other accounts
Once every 12 months, you can roll over an existing HSA
balance. You must initiate the rollover within 60 days of
constructive receipt by using the HSA Contribution Form
You can transfer an existing HSA balance without time
limitations. You must initiate the transfer by using the HSA
Transfer Request Form at www.DiscoveryBenefits.com.
You may also perform a one-time rollover from your individual
retirement account (IRA) to your HSA as long as you remain
within your annual contribution limit and you remain HSA-
eligible for a year af�er your rollover. If you become ineligible
for the HSA by no longer being covered by the HDHP or
having non-HDHP coverage, the entire amount of the rollover
is taxed and is subject to a 10% penalty tax. To initiate the
rollover from your IRA, contact your IRA provider.
WHY CHOOSE A DISCOVERY BENEFITS HSA?
Expenses can be reimbursed from your HSA for the diagnosis, cure, mitigation, treatment or prevention of
diseases and for treatments a�ecting any part or function of the body. The expenses must be primarily to
alleviate or prevent a physical or mental defect or illness. Expenses solely for cosmetic reasons generally are
not expenses for medical care. Also, expenses that are merely beneficial to your general health are not eligible.
Examples of eligible expenses *:
Birth control (pills,
Contact lens solution
Hearing aid batteries
*A detailed list, IRS Publication 502, Medical and Dental Expenses, is available at www.DiscoveryBenefits.com. Over-the-counter
medicines and drugs will require a physician’s prescription in order for them to be eligible for tax-free reimbursement from the HSA.
Tips for smooth spending
Choose the way you pay for eligible expenses.
Pay upfront and get reimbursed.
• Pay for services and products.
• Request a distribution through your online account.
• If you wish to access funds that are invested, please allow five business
days for processing.
Pay eligible expenses with your Discovery Benefits Debit Card.
• Use your Discovery Benefits debit card to pay for eligible services and
• Payments are automatically withdrawn so there are no out-of-pocket
costs. Note: The card will pull funds from your cash account and does not
pull from invested funds.
• Receive one card when you enroll.
• Request additional cards for your spouse and dependents 18 years of
age or older for free.
• Replace lost or stolen cards for free.
Grow your savings
Grow funds for long-term security — unexpected healthcare costs won’t know what hit them.
A savings account — not a spending account
• Funds saved in your HSA grow tax-deferred while earning tax-free interest. Start by saving just enough to cover your
deductible amount each year so you can turn to the HSA when you need it most.
• Unlike with an FSA, funds aren’t forfeited at the end of the year, so unused balances stay in the account. The “Use or
Lose” rule does not apply to HSAs.
• Invest your HSA funds in mutual fund options — just like you would invest your 401k dollars — to grow your balance
Discovery Benefits Debit Card tips:
• Don’t use the card for amounts
that still need to be processed
through insurance, such as
deductibles. When you receive
your final statement from the
provider showing insurance has
been paid, write your Discovery
Benefits debit card number on
the statement and mail it to your
• We will not ask you for any
records to substantiate services or
purchases, but the IRS could. Keep
your statements and receipts for
• If you are enrolled in a Limited
FSA, you can only use your
Discovery Benefits debit card for
dental and vision expenses. Once
you meet your annual deductible,
you may use your FSA (but not
your card) for all eligible IRS
expenses (if your plan allows).
Check your plan description for
details about the Limited FSA.
• Direct deposit — fast and
• Check — the default unless
you enroll in direct deposit
Af�er you pay up front for medical
expenses, you request reimbursement
from your HSA.
• Distributions are tax-free for
qualified expenses that are
incurred while you are an HSA
• There’s no time limit for
Good record keeping is key
to a successful HSA
You don’t have to submit
substantiation to receive your
reimbursement. However, you will want
to keep good records for the IRS:
• Keep receipts and documentation
for each year’s federal tax return.
• You can upload and save
receipts in your online account.
• Complete IRS Form 8889 and
attach it to your Form 1040.
• Each year, Discovery Benefits
will make the following tax forms
available on your consumer portal
by January 31:
• Form 1099-SA, showing your
• Form 5498-SA, showing your
Request your money online
Simply request your distribution online at www.DiscoveryBenefits.com.
• Payment will be made based on
available funds in the account.
• You can request payment to be
made directly to your provider.
• Funds are sent via direct deposit
to your checking or savings
account within five days from
the request date.
• Additional processing time
may be required when invested
funds must be sold to provide
Keep in mind, using your Discovery Benefits debit card eliminates the need for reimbursements altogether.
You can make non-medical
withdrawals from your HSA
at any time.
• Non-medical distributions
become taxable income and
a 20% penalty may apply.
• If you are disabled or age 65+, you
can withdraw your money without
penalty, but you must report your
distribution as taxable income.
• You may use your funds for a
spouse or dependent not covered
under your HDHP.
Collect Your Funds
The money in the HSA is yours to use for
medical expenses or to invest and grow.
Even when you are no longer actively
contributing to an HSA, you still have access
to the remaining funds.
You can also make contributions or request distributions using the free Discovery Benefits mobile
application, available for Apple and Android devices.
HIPAA (the Health Insurance Portability and Accountability Act) has changed the way we share
information. We do not share balances, claims or payments with spouses or anyone else without an
assigned authorization form from you. If you decide you want us to share information with someone, simply
complete an Authorized Representative Form and send it to us. The authorization is in e�ect indefinitely,
unless we receive a written request from you to terminate the authorization.
• File a claim
• Check account balance and claim status
• View account history
• Access administrative forms
• Contact us via email
• Manage your profile
• Live chat
• Speak to a service representative,
M-F 6:00 a.m. to 9:00 p.m. CST
• Get answers to your HSA questions
• Access account balance information 24/7 through
an Interactive Voice Response (IVR) system
• Be prepared to verify the primary accountholder’s
information when calling
We’re here for you.
866-451-3399 · 866-451-3245
PO Box 2926 · Fargo, ND 58108-2926