Lubrizol CDHP and Health Savings Account

These Frequently Asked Questions were created to provide you with an overview of Health Savings Accounts and are not intended to be a complete resource.  These FAQs are not intended to be, nor should be construed as, tax advice, and your individual circumstances may affect your own tax result.  We recommend that you confirm with your tax advisor any questions you may have about the tax treatment of HSAs.  You may also wish to review IRS Publication 969 at irs.gov for more details.  

 

What is a consumer-driven health plan (CDHP)?

A CDHP is a health insurance plan that combines a high-deductible medical plan with a tax-free health savings account (HSA) that you can use to pay for eligible health care expenses. CDHPs provide affordable, comprehensive health care coverage, and they encourage individuals and their families to be more accountable and engaged in their health care decisions.

A big reason for the growing popularity of CDHPs is the opportunity to save money in an HSA. As the health care landscape continues to change and individuals have more health insurance options, HSAs provide a way for individuals to save tax-free*money for their health care expenses and keep the money for future health care expenses, even if they change health plans, change jobs, or retire.

 

How do the Lubrizol CDHP Plans work?

The Lubrizol CDHP Plans have two separate components that work together to provide you with comprehensive health care coverage and a tax-free* way to pay for the care you receive. Here is how a CDHP works:  

• Once you meet the annual deductible, the plan pays 20% of covered services. This is called co-insurance. 

• Once you meet the out-of-pocket maximum for the year the plan pays 100% of covered expenses for the remainder of the year.

• Any money left in your HSA at the end of the year rolls over from year to year. The money in your account is always yours, even if you change health plans, change jobs or retire.

 

How do I pay my provider when enrolled in a CDHP?

Typically, you are not required to make payment at the time of medical service.  Instead, you present your medical ID card, which contains billing instructions for your provider.  The provider will send the claim to UMR for processing.  UMR will process the claim by applying any discounts, such as the discount you receive for using a network provider.  They will then consider if the service is preventive or diagnostic based on the information the provider included, apply your deductible, if applicable, and prepare payment, if appropriate, for the provider.  They will issue an Explanation of Benefits (EOB) that explains what payment is due and from whom.  UMR will post the EOB to your online account at www.umr.com and send a copy to your provider along with any payment due them.  The provider will send you an invoice for any amount you owe once they receive the EOB.  Once you receive the invoice from the provider that indicates what is your responsibility and what the plan paid, you should pay your provider.  Payment can be made directly to the provider or by using www.umr.com.

 

If you have a prescription filled, payment is expected at the time of service.  Present your prescription ID card.  You will pay the provider what you owe at that time using your Health Savings Account (HSA) or another method of payment.  The amount charged reflects any discounts, which have been applied.   

 

Remember, in all cases except preventive care, you are required to meet your annual deductible before any payment is made by the plan.

 

What is a Health Savings Account (HSA)?

An HSA is a bank account that lets you put money aside, tax-free*, to save and pay for qualified health care expenses. It’s a real bank account, but you don’t pay federal income tax on the money you deposit into it or the money you use for qualified medical expenses.

 

How do I qualify for an HSA?

With some exceptions, to qualify for an HSA, you must enroll in a high-deductible health plan (e.g., the Lubrizol CDHP Plans). After you enroll in a Lubrizol CDHP, an account will be opened in your name through Optum Bank. Federal banking regulations require you to affirm your agreement to the opening of an account in your name, and you must accept this affirmation when you enroll online in a Lubrizol CDHP.

 

What are the advantages of an HSA?

An HSA has several advantages: 

• You get triple tax advantages. * You can contribute pre-tax money to your account, your account can grow by earning tax-free interest, and you pay no taxes when you use the money for eligible expenses.

• You can use it now or save it for later. You can use the money in your account to pay for current or future eligible health care costs.

• You can invest it. If you choose to let your account grow, you can invest the money in a choice of investment options once your balance has reached a minimum of $2,000.

• You can roll it over.  Your unused account balance rolls over from year to year, and there is no limit as to what your account can grow to.

• You keep the money.  The money in your account is always yours, even if you change medical plans, leave the company, or retire.

 

Does Lubrizol contribute to my HSA?

Yes. Lubrizol deposits an annual amount in your HSA based on the plan option and coverage level you select. Lubrizol’s contribution is deposited in the HSA after the first pay period of the year. 

 

How much can I contribute to an HSA?

The IRS sets the contribution limits each year. For the 2023 plan year, the limit is $3,850 for single coverage and $7,750 for single plus one or family coverage. This includes your contribution plus Lubrizol’s contribution to your account. You can make additional contributions through regular, pre-tax payroll deductions or through after-tax deposits to your HSA. You may claim after-tax HSA contributions on your federal income tax return.

People who are age 55 or older in 2023 and not eligible for Medicare can contribute an additional $1,000 in “catch-up” contributions. You can make your catch-up contribution at Lubrizol.benefitsnow.com or you can make an after-tax contribution and later claim it on your taxes.

 

What can I use my HSA to pay for?

Money in your HSA can be used to pay for deductibles, coinsurance, and qualified health services such as doctor’s office visits, in-patient and out-patient hospital care, emergency care, lab work, X-rays, prescription drugs, and dental services. A complete list can be found in IRS Publication 502 (www.irs.gov).

 

What expenses don’t qualify for reimbursement through the HSA?

Examples of expenses that do not qualify include cosmetic surgery, health club memberships, teeth whitening, and over-the-counter medicines purchased without a prescription, to name a few. If you use your HSA to pay for an expense that is not qualified, you will have to pay taxes on the expense and may also have to pay a 20% penalty.  If you are in doubt about whether an expense is reimbursable from your HSA without you incurring taxes or a penalty, consult your tax advisor.

 

Can I enroll in an HSA and a Dependent Care Account?

Yes, you can still enroll in the Dependent Care Account to save money on your dependent child and adult daycare expenses.

 

What happens if I do not use all the funds in my HSA during the year?

If you do not use all the funds in your HSA during the year, your remaining balance rolls over to the next year. Your account balance can grow through company contributions, your contributions, and investment returns.

 

How do I invest my HSA dollars?

Once you have a balance of $2,000 in your HSA, you can choose to invest your HSA dollars.  A variety of mutual funds are available for that purpose.  You can view the current list of available mutual funds by logging into your Optum Bank account through single sign-on at www.umr.com or www.optumbank.com.  

 

What happens to the money in my HSA if I change health plans or leave the company?

The money in your HSA is yours to keep.  If you leave Lubrizol, change health plans, or retire, you take your HSA with you.  If you switch to a health plan that makes you ineligible to continue depositing money in an HSA (like the Lubrizol OOA, etc.), you may continue to use the money in your account for qualified medical expenses, but you can no longer make contributions.

 

Can I enroll in a Lubrizol CDHP with the HSA if I am also enrolled in my spouse’s traditional health plan?

No.  You cannot be enrolled in a Lubrizol CDHP with an HSA if you are also enrolled in a traditional health plan (like a PPO or an EPO).  This is because the Lubrizol CDHP Plans come with an HSA and a contribution from Lubrizol.  IRS regulations state that you cannot contribute to an HSA (this includes Lubrizol’s contribution) and be enrolled in a traditional health plan.

 

If my spouse has his or her own health plan with an HSA, can I also contribute to it?

Yes, but the IRS says the two of you together can only contribute up to the family limit.  Both of you can contribute to just one of your HSAs, or you can contribute to both HSAs if the total amount doesn’t go above the annual family limit.  Remember, the 2023 IRS family limit is $7,750 and all contributions, employer and employee, are considered toward meeting that family limit. 

 

I want my HSA dollars to go as far as possible.  How can I find out how much a treatment or procedure is going to cost?

Included Health can help you estimate your health care costs.  You can contact them at 1-855-431-5532.  You can also do some simple things to help keep your costs in check:

• Get preventive care.  It is 100% covered and your deductible does not apply.  Taking steps now to stay healthy may prevent higher costs down the road.

• Use your benefits wisely.  See providers within the UnitedHealthcare ChoicePlus network, choose generic prescription drugs, when possible; take advantage of Included Health Virtual Everyday & Urgent Care visits for non-emergency situations, and use your available health care consumer tools.

 

How do I pay with an HSA?

If you receive a bill from your doctor or if you are paying for a prescription, you can pay from your HSA using your HSA debit card.  If you purchased checks from Optum Bank, you could use your checks to pay your bills. 

 

If I paid a health care bill from my credit card, can I pay myself back from my HSA?

Yes, if the service is a qualified expense and you have the funds in your HSA.  You can take money out of your HSA to pay yourself back with no penalty.  You can initiate a reimbursement by logging into your Optum Bank account through single sign-on at www.umr.com or www.optumbank.com.

 

Can I use the HSA for my spouse or dependents if they’re not covered under my plan?

You can use the HSA to pay for qualified expenses of any family member if the family member is claimed as spouse or dependent on your taxes, regardless of what type of medical plan your spouse is enrolled in. 

 

If I am covering an adult child, can I use my HSA to help pay for his or her qualified medical expenses?

Your child must be your tax dependent for you to be able to use your HSA to pay for your child’s eligible medical expenses.  If your child is not your tax dependent, but is covered by your plan, he or she may be able to open his or her own HSA. 

 

If I cover my domestic partner under the plan, can I use my HSA for my partner’s medical expenses? 

If your domestic partner meets the IRS qualifications of a tax dependent, you can use your HSA to help pay his or her qualified expenses.  If your partner is not your tax dependent, you can still cover your partner under your plan.  However, your partner would need to open and fund his or her own HSA to pay for eligible medical expenses through an HSA.

 

Can I use my 2023 HSA funds for medical bills I receive in 2023 for medical services I had in 2022?

It depends. For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses.  Therefore, if you are in the Core plan in 2023 you cannot use your 2023 HSA to reimburse your 2022 medical services without penalty.  However, if you are in the CDHP with HSA in 2023, you can use the 2023 HSA funds for expenses incurred in 2022.

 

What happens to the money in my HSA after I turn age 65?

You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums (parts B and D), deductibles, copays, and coinsurance under any part of Medicare. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “MediGap” policy. Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-eligible medical expenses will owe income tax and a 20% penalty on the amount withdrawn.

 

I'm 55 and would like to make “catch-up” contributions to my HSA, like I've done with my 401(k). Is that possible?

Yes, individuals 55 and older who are covered by a Lubrizol CDHP can make additional catch-up contributions each year until they enroll in Medicare. For 2023, the additional HSA catch-up contributions allowed are $1,000.

 

I turned 55 this year. Can I make the full “catch-up” contribution?

If you had CDHP coverage for the full year, you could make the full “catch-up” contribution regardless of when your 55th birthday falls during the year. If you did not have CDHP coverage for the full year, you must pro-rate your “catch-up” contribution for the number of full months you were "eligible," i.e., had CDHP coverage.

 

How do I make a catch-up contribution?

You can make your contribution at Lubrizol.BenefitsNow.com or you can make an after-tax contribution and later claim it on your taxes.

 

If my spouse and I are both at least 55, can we both make “catch-up" contributions?

Yes, if both you and your spouse are eligible individuals and both you and your spouse have established your own HSAs. If only one of you has an HSA in your name, only that account holder can make a “catch-up” contribution.

 

My spouse is on Medicare. Can I contribute to the HSA?

Yes.  If a spouse will be eligible for, or is already covered by Medicare, you can sign up for the Lubrizol CDHP and contribute to an HSA.  If you file taxes jointly with your spouse, you can use your HSA to help pay for your spouse’s qualified expenses, such as Medicare premiums.

 

Where can I see my current HSA balance and/or track my HSA spending?

You must log-in to your Optum Bank account through single sign-on at www.umr.com or www.optumbank.com.

 

Where can I make changes to my per pay HSA contributions?

You will make changes to your per pay HSA contributions at Lubrizol.BenefitsNow.com. 

 

Can I roll over funds from another HSA into my HSA associated with the Lubrizol CDHP?

Yes.  You must log-in to your Optum Bank account through single sign-on at www.umr.com or www.optumbank.com for the required forms.