Consumer-Directed Health Plans (CDHP) and Health Savings Accounts (HSA)

Consumer-directed health plans (CDHPs) offer a low monthly premium, balanced with a higher deductible and out-of-pocket maximum. However, members can use funds in their health savings account (HSA) to pay for many out-of-pocket costs (including deductibles), or allow HSA savings to grow for future medical expenses. When you enroll in a CDHP, your employer or the PEBB Program contributes money into your HSA on a prorated basis. This will add up to $700.08 annually for a single subscriber, or $1,400.04 annually for a subscriber and one or more covered dependents. The entire amount is not deposited in the HSA on January 1. If you are a single subscriber, your employer will contribute $58.34 each month in your HSA as long as you remain eligible for enrollment in a CDHP. If you have a dependent enrolled, your employer will contribute $116.67. Members may also choose to make tax-free contributions to their own HSA, up to IRS annual limits. To learn more, call HealthEquity, the trustee for your HSA, at 1-877-873-8823.

Yes. Similar to an IRA, many HSAs let you choose to invest a portion of your account balance in stocks, bonds, mutual funds, CDs, and/or other annuities. With your Kaiser Permanente WA CDHP, you can invest in preselected mutual funds after you reach a $2,000 balance in your account.

In 2023, the maximum annual contribution limits set by the IRS for an individual account is $3,850 and the maximum contribution for family coverage is $7,750. People 55 and older may contribute up to $1,000 more annually in addition to the limits above.

You may take that money with you wherever you go — it's your money and your account. If you're on Medicare or go to another employer that doesn't have a qualified CDHP, you can still use your HSA money to pay for copays and qualified medical expenses, but you won't be able to make contributions to your HSA.

The money rolls over from year to year. You don't lose the money you left in your HSA or the interest it earned.

Yes, you can take the money out anytime tax-free and without penalty as long as it's to pay for qualified medical expenses. If you take money out for other purposes, however, you'll have to pay income taxes on the withdrawal plus a 20% penalty.

Yes, the money in your HSA can be used to pay for qualified medical expenses of any family member who qualifies as a dependent on your tax return. However, if the dependent isn't covered under your plan, their expenses won't be applied toward your deductible.

Yes, but if you do (and you are under age 65) you'll be taxed on the money you use and assessed a 20% penalty. Once you are 65, you'll be taxed for moneys used for non-medical expenses, but you won't pay the penalty.