Opening Your HSA

Opening Your Account

To open your account, log on to Fidelity at www.netbenefits.com and click Health Savings Account under the Health and Insurance tab. When your application is complete you can also request a debit card and a checkbook. If you do not have access to NetBenefits, you may contact Fidelity at 1-800-343-0860 and request an application. Your HSA will be considered a Fidelity Brokerage account; your application must be submitted and approved before the HSA is opened.

Account Growth

Your HSA can grow in two ways:

  1. Core position account interest: The Core Position Account is the account that holds your initial HSA contributions and the account that you access to pay expenses using funds in your HSA.  You will earn interest on the balance in this account.
  2. Investment account earnings: When the balance in your core position account is at least $2,500, you may invest a portion of your savings among several Fidelity mutual funds and/or money market funds, non-Fidelity funds and individual stocks and bonds, all with varying risk/reward profiles.  Most mutual funds require a minimum initial investment of $2,500 and $250 on any subsequent investments; this, however, can vary by fund.

The funds in your HSA (including any amount invested in mutual funds) accumulate tax-free, year after year.

Eligible Expenses

Here are some examples of expenses that can be reimbursed tax-free through your HSA:

  • Health expenses used to meet the BU Health Savings Plan deductibles,
  • Most other out-of-pocket health, dental and vision expenses that are covered by your current health plans (hospitalization, lab and x-ray services, office visits and prescriptions), and
  • Numerous health-related expenses not usually covered by your health plan, including copays and deductibles for eligible dependents, even if they are not enrolled in your BU Health Savings Plan, and premiums for Medicare coverage, including Part D, COBRA medical coverage and long-term care insurance (limits apply).

Note: Distributions from your HSA are available up to the amount of your account balance as of the withdrawal date. For your tax records, be sure to keep receipts for all expenses reimbursed from your HSA.

Tax Information

Tax treatment of your distributions is based on why and when you withdraw your money:

  • Withdrawals for qualified health expenses for you and your eligible dependents are always tax-free.
  • Withdrawals for nonqualified expenses after you reach age 65 are subject to regular income taxes.
  • Withdrawals for nonqualified expenses before you reach age 65 (unless you are disabled or die) generally are subject to income taxes plus a 20% tax penalty.