Open enrollment is your chance to take a fresh look at your health coverage for the year ahead. But choosing between plans isn’t always simple – especially when you’re weighing different premiums, deductibles, and out-of-pocket costs.

If a high-deductible health plan (HDHP) is one of your options, there’s another benefit worth considering: You may also be eligible for a Health Savings Account (HSA). An HSA can help you set aside money for qualified medical expenses while offering potential tax advantages along the way.

So, how does an HSA work, and could it make sense for you? Here’s what to know as you compare your options during open enrollment.

What is an HSA?

A health savings account is a tax-advantaged account that eligible individuals can use to save and pay for qualified medical expenses. Depending on your circumstances, an HSA may offer several tax advantages:

• Tax-deductible contributions: Contributions may be tax-deductible, depending on your circumstances.
• Tax-free growth: Money in the account can grow tax-free if you opt for an interest-earning HSA account.
• Tax-free withdrawals: Withdrawals used for qualified medical expenses may be tax-free.

What makes a health plan HSA-eligible?

To contribute to an HSA, you need to meet IRS eligibility requirements, including having a qualifying high-deductible health plan. You generally can’t have disqualifying additional health coverage, be enrolled in Medicare, or be claimed as someone else’s tax dependent.

For 2027, an HSA-qualified HDHP must have a minimum deductible of $1,750 for self-only coverage or $3,500 for family coverage, and annual out-of-pocket expenses can’t exceed $8,700 for self-only coverage or $17,400 for family coverage.

Plan requirements can change, so review the details of your specific plan.

Why consider an HSA?

An HSA may appeal to people who want to set aside money specifically for qualified medical expenses while keeping unused funds available for the future.

Potential benefits include:

• Year-to-year flexibility: Unused money remains in the account rather than expiring at the end of the plan year.
• Portability: The account stays with you if you change jobs.
• Potential growth: Depending on the HSA provider and account, funds may earn interest or have investment options.

For 2027, the contribution limit is $4,500 for self-only coverage and $9,000 for family coverage. Employer contributions count toward these limits.

When might an HSA-eligible plan not be the right fit?

An HSA can offer useful benefits, but that doesn’t automatically mean an HSA-eligible health plan will work for everyone. These plans generally come with higher deductibles, which means you may pay more out of pocket for covered care before the plan begins paying its share.

An HSA-eligible plan may require a closer look if you:

• Expect frequent doctor visits, procedures, or other medical care.
• Take regular prescription medications and have significant prescription costs.
• Prefer more predictable costs when you receive care.
• Would have difficulty covering a higher deductible if you need care early in the year.
• Have other coverage or an account that could affect your HSA eligibility.

Consider the potential HSA benefits alongside the plan’s premiums, deductible, out-of-pocket maximum, and your expected health care expenses before making a decision. Open enrollment only comes around once a year – the choice you make now shapes your coverage and costs for the next twelve months.

An HSA-eligible plan isn't right for everyone, but for the right person, it can turn routine savings into real tax advantages.

Choosing a health plan is an important financial decision, and understanding your savings options can make a meaningful difference over time. Whether you're looking for convenient access to your funds or opportunities to earn more on your savings, Chevron Federal Credit Union offers HSA options designed to help you manage healthcare costs with confidence. Contact us today to learn more.

HSA Frequently Asked Questions

What happens to unused HSA money?

It stays in your account (no "use it or lose it") and moves with you if you switch employers.

Can I use an HSA for prescriptions?

Yes. Prescription medications are generally considered qualified medical expenses when they meet IRS requirements.

What happens to my HSA if I change jobs?

The account belongs to you, not your employer. You can keep and continue using the funds after changing jobs.

Where can I open an HSA?

Your HSA doesn't have to be with your insurance provider. Once you're eligible, compare providers on fees, features, and investment options. Chevron FCU’s HSA Checking and HSA MarketEdge accounts earn the same great rates as our regular Member Checking and MarketEdge Money Market Savings accounts, and there are no monthly administration fees or minimum deposit, balance, or distribution limits.

What should I ask during open enrollment?

Consider asking:

• What will premiums cost me over the year?
• What's the deductible and out-of-pocket max?
• Will my employer contribute to the HSA?
• Are my doctors and prescriptions in-network?
• What can I pay for with HSA funds?
• Could other coverage affect my HSA eligibility?

Does my employer have to contribute?

No – it's optional, not required.