Health Savings Account

How does an HSA work?

When you enroll in the HSA 3200 or the HSA 1600 medical plans, you have access to a Health Savings Account (HSA). The HSA allows you to set aside tax-free money to pay for eligible health care expenses now or in the future.

Some things to know about the HSA:

You receive triple tax savings: money goes into your account on a pre-tax basis through payroll deductions, your money grows tax-free with interest, and money is withdrawn tax-free when used to pay for eligible healthcare expenses.
Your balance rolls over from year to year – there’s no “use it or lose it” rules so you can build up significant tax-free savings over time.
The money in your HSA is yours, which means you can take your HSA balance with you if you leave Cummins, including any Cummins contributions.
You decide how to use the funds. You can spend them (use your HSA to pay for out-of-pocket healthcare expenses. You’ll be reimbursed up to the amount that’s deposited in your account), save them (pay for out-of-pocket expenses with other funds and leave your HSA balance to grow), or both (use your HSA to pay for some out-of-pocket expenses and save the rest).
You control your contributions: You can stop, change or restart your HSA contributions during the year until the change freeze date.

Contributions:

Both you and Cummins contribute to the HSA provided you are enrolled in a Cummins HSA medical plan and you meet the IRS eligibility criteria.

IRS contributions limits:

The HSA contribution limits for 2024 are $4,150 for individual coverage or $8,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

Your contributions:

You can elect HSA employee contributions. These are deducted from your Cummins payroll and funded into your HealthEquity account.
HealthEquity also allows direct funding into your account. These are known as “after-tax” contributions and reflect on your year-end taxes.

Changing your contributions:

To make a change to your HSA Contributions, please do the following:

Log on to Cummins Health Benefits (“CHB”) Service Center.
Click on “Report a Qualified Life Event.”
Select the “Change in Health Saving Account” Button, and Save and Continue
Once you have read the disclaimer, click on Agree and Save and Continue
Click on the “Change Election” button on the HSA tile, make your desired change to your contribution, and click on “Done with the selection”
Select Save My Election once you have reviewed your choices.

If you have any questions, please contact our Cummins Health Benefits Service Center at 877-377-4357

Cummins contribution:

Cummins contributes to your HSA an amount based on your annual base salary as of January 1 of each year (base salary excludes team pay, shift differential, overtime and bonus/incentive pay).

If you make less than $50,000 including average commissions, Cummins will contribute $1,000 for individual coverage and $2,000 for all other coverage levels.
If you make more than $50,000, Cummins will contribute $500 for individual coverage and $1,000 for all other coverage levels.
New hires will receive a prorated funding based on hire date and annual base salary.
If you do not meet the IRS HSA eligibility criteria but have enrolled in the Cummins HSA 1600 or HSA 3200 medical plan, your Cummins employer contribution will be funded into a Health Reimbursement Account.
Keep in mind the Cummins contribution to your account and any funding you are making through employee contributions or after-tax contributions count towards the annual maximum contribution limits for the year.

Using Your HSA to Pay for Eligible Expenses

When you or your qualifying dependent incurs an eligible expense, you can use the money in your HSA to pay for the expense. The funds may can be used to pay for health expenses for your adult children covered on the plan only if they can be claimed as a deduction on your income taxes.

Eligible expenses include:

Doctor visits
Prescription drugs
Certain over-the-counter medicines (aspirin, cold medicine)
Medical supplies such as Band-Aids, saline solution, diabetic supplies and menstrual products
Dental care
Vision care
Nursing care
Psychiatric care
Chiropractic care

See the full list of eligible expenses at HealthEquity QME or by visiting the IRS website.

You can use your HSA debit card to pay for an eligible expense:

When you go to the pharmacy: Use your HSA debit card for qualified purchases (such as prescriptions or medical supplies).
When you go to the doctor: Wait to pay after you receive your Explanation of Benefits (EOB), followed by the bill from your provider. Then, send payment to your provider by HSA check or by completing the credit card payment option on the bill, using your HSA debit card number.

Investing in the HSA

Once your HSA balance reaches $1,000, you can invest money in your HSA in a variety of investment options through HealthEquity.
You can set up your account to transfer your HSA dollars automatically into, out of or within a selection of mutual funds, and add additional investments online.

Access your HealthEquity account to review investment options and see your balance.

Eligibility

There are rules regarding eligibility for the HSA. By law, you cannot contribute to the HSA if:

You enroll in a medical plan sponsored by your spouse’s/domestic partner’s employer that is not a high deductible health plan, even if you also enroll in a Cummins HSA medical plan.
You or your spouse contributes to a health care flexible spending account, such as our Health Care FSA, that provides tax-free reimbursement of eligible health care expenses.
You are enrolled in Medicare.
You have received VA benefits in the last three months.

If you enroll in a Cummins HSA medical plan but are not eligible to contribute to an HSA, Cummins will establish a Standalone HRA for you instead. Refer to the Standalone HRA section for more details

Health Reimbursement Account (HRA)

If you enroll in a Cummins HSA medical plan but do not meet the IRS eligibility requirements to make or receive HSA contributions, Cummins will establish a Health Reimbursement Arrangement (HRA) for you with HealthEquity. The HRA is a Cummins-sponsored account funded entirely by Cummins to help you pay for qualified healthcare expenses such as deductibles, coinsurance, pharmacy expenses and more. Here are some key features of the Standalone HRA:

Cummins funds your HRA each year – This amount is determined by your salary and coverage level. If you make more than $50,000 a year you will get $500 for single coverage, and $1,000 for family coverage. If you make less than $50,000 a year, you will get $1,000 for single coverage or $2,000 for family coverage. The annual funding will occur in early January and funds are available right away for you to use on any eligible healthcare expense incurred after your Standalone HRA account is established. If you are enrolled mid-year, the Cummins contribution is prorated based on the month you are hired or enroll.

Pre-tax employee contributions – You cannot make employee contributions to a HRA like you can an HSA or FSA.

How to use your funds – once your account is created, HealthEquity will link a debit card to your HRA. You can use your HRA debit card to pay for an eligible expense.

No “use it or lose it” – Any funds left in the HRA at the end of the year roll over to the next year. Unlike the FSA, you don’t have a deadline to spend all your HRA funds or lose them.

What else should I know?

By law you cannot contribute to a Health Savings Account if you have medical coverage other than a high deductible health plan. This means you cannot contribute to an HSA if:

You enroll in a medical plan sponsored by your spouse’s/domestic partner’s employer that is not a high deductible health plan, even if you also enroll in the Cummins HSA medical plan.
You or your spouse contributes to a health care flexible spending account, such as our Health Care FSA, that provides tax-free reimbursement of eligible health care expenses.
You are enrolled in Medicare.
You have received VA benefits in the last three months.

Even if you are no longer covered by one of the Cummins HSA health plans, you can still continue to use any money remaining in your HSA account to pay for your medical expenses. You own your HSA dollars and can use them whenever you want for qualified health care expenses (that is, medical, prescription drug, dental and vision expenses).