The Office of Human Resources

Opening and Contributing to your Fidelity HSA

How do I open a Fidelity HSA?

Prior to opening your HSA, you must be enrolled in an HSA-eligible health plan. When you’re ready, opening and managing your HSA with Fidelity is fast and easy. You’ll get information on investment choices, payment options, and ongoing support to help you build and manage your savings.

For convenience, you can open a Fidelity HSA online. To begin, simply log into NetBenefits® at Netbenefits.com.  From the homepage, click Open next to Health Savings Account.

• Pretax contributions. You may elect to contribute to your Fidelity HSA through automatic payroll deductions on a pre-tax basis. You can elect your payroll contribution amount through your benefits enrollment process and may change it at any time. Contributions made through payroll deductions are exempt from FICA tax.

HSA-eligible health plans typically have lower premiums than traditional health plans. You may want to consider contributing the money you save on those lower premiums to your HSA.

Over time, that money has the potential to grow tax free² while you save to pay for future qualified medical expenses.

• After-tax contributions. At any time, you may make an after-tax contribution to your Fidelity HSA by check or by transferring money online between your bank and Fidelity by electronic funds transfer (EFT). After-tax contributions are tax deductible to the extent you do not exceed your allowable contribution limit.

You may also transfer assets from another HSA (provided the account type and registration are the same) or make a one-time qualified HSA funding distribution from an IRA.⁵

What are the contribution limits for HSAs?

Each year, the IRS establishes contribution limits for the upcoming year. These limits are for total contributions made to your account, including those made by you, your employer, and any other third party.

Your maximum annual contribution limit depends on several factors, including when you enrolled in an HSA-eligible health plan, whether you have individual or family health care coverage, and your age.⁶ If you are age 55 or older, you can contribute up to an additional $1,000 each year as a catch-up contribution. This also applies to your spouse if he or she is age 55 or older. Note, however, that your spouse must open an HSA for his or her own catch-up contribution.

How much should I contribute to my HSA?

You should always prepare for the unexpected by saving enough money in your core position to cover your anticipated out-of-pocket medical expenses for the year (including those of your spouse and eligible dependents).

Consider contributing at least up to your plan’s deductible, and if you can afford to do so, contribute above that to save and invest for future medical needs.

What investment options are available for my Fidelity HSA?

Your Fidelity HSA is a single account that allows you to manage a portion of your savings in a high-yield core position and invest the rest for future medical expenses. You can start investing at any time by making a one-time trade or setting up automatic investing for future contributions. And there’s no required minimum to begin investing.⁷

An investment trigger can help you keep enough in the core position to pay for current medical expenses, and any contri­bution beyond that amount will be automatically invested in your chosen investments.

You can choose to invest in a variety of investment options, including the Fidelity HSA® Funds to Consider, which is a professionally selected lineup of funds with no minimums or transaction fees, as well as more than 10,000 mutual funds, individual stocks and bonds, ETFs, and CDs available on Fidelity’s brokerage platform.⁸

In addition, the HSA Investment Recommendation tool is available online, providing assistance on how to invest your HSA savings. This experience takes into account your unique HSA savings goals, risk profile, and financial situation to provide investment advice with fund suggestions from the Fidelity HSA® Funds to Consider⁸ lineup.

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²With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. See your tax professional for more information on the state tax implications of HSAs.

⁵Note that the amount transferred counts toward the maximum annual contribution limit. Additionally, an individual must remain an eligible individual for the 12 months following the month the IRA distribution was made; otherwise, the amount must be included in the individual’s gross income and will be subject to an additional 10% tax.

⁶The maximum annual contribution limit is based on your age and coverage tier (i.e., individual or family), as well as on when you become enrolled in an HSA‑eligible health plan. Normally, for eligible individuals who enroll in the HSA-eligible plan as of the first of the plan year, the HSA contribution is prorated based on the number of months during the year a person is covered by an HSA-eligible plan as of the first day of the month. Individuals enrolled
in an HSA‑eligible health plan after the beginning of the plan year may contribute up to the statutory maximum annual contribution amount as long as they are eligible individuals in December of that tax year and remain eligible individuals for a full 12-month period following such month. If an individual fails to meet these criteria, the maximum annual contribution amount must be prorated based on the number of months he or she is an eligible individual,
and any amount above such prorated amount is includible in the individual’s gross income and subject to a 10% tax.

⁷There may be funds that require a minimum amount to invest, but Fidelity does not require a minimum to start investing

⁸In identifying investment options to include in the Fidelity HSA Funds to Consider, Fidelity only considered Fidelity open-end mutual funds and open-end mutual funds offered by a limited universe of third-party fund companies that participate in an exclusive marketing, engagement, and analytics program with Fidelity for which they pay Fidelity an annual fee. The only third-party fund companies whose funds were eligible for this program were companies that generally have a track record of generating the strongest customer demand for their products from across Fidelity’s customer channels and have been paying Fidelity a sufficient level of compensation for the shareholder servicing performed by Fidelity