Health Savings Account

A Health Savings Account (HSA) lets you set aside pre-tax dollars for current or future health care expenses and manage health care costs over time. The HSA is administered by Optum Financial and is available to employees enrolled in the BCBSIL QHDHP.

Why an HSA is so great

An HSA helps you save for current and future medical and health care expenses — and save on taxes. We call that a win-win! The HSA is a triple-tax-advantaged account that is yours to keep, even if you leave the company or retire. This means:

  • The money you contribute to your account is tax-free. 
  • The money you withdraw to pay for eligible medical expenses is tax free — now or in the future. 
  • You can invest any balance over $1,000. The money you invest and the interest you earn are tax-free.

Any money you don’t spend stays in your account, helping you save for future medical and health care expenses. There is no use-it-or-lose-it rule.

After you turn 65, you can withdraw funds for any purpose without any penalty. Just keep in mind that withdrawals for ineligible expenses are treated as retirement income and are subject to income tax.

Funding your account

Both you and State Farm contribute to your HSA.

  • To receive State Farm contributions to your HSA, you must first enroll in the BCBSIL QHDHP and set up your HSA through Optum Financial. 
  • You choose how much to contribute (up to the IRS limit), and the money comes straight out of your paycheck pre-tax. 
  • Unlike a Flexible Spending Account (FSA), you can change your HSA contribution amount at any time during the year. 
  • State Farm contributions are made bimonthly (no contribution during the third pay period) and accumulate over time: 
    • $25 employee-only coverage, up to $600 annually
    • $50 employee + dependent coverage, up to $1,200 annually

2026 contribution limits

ContributionsEmployee-only coverageEmployee + dependents
IRS limit for all contributions$4,400$8,750
State Farm annual contribution$600$1,200
Your annual contribution limit$3,800$7,550
Catch-up contribution for employees age 55 and older$1,000$1,000
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What is HSA OnDemand?

HSA OnDemand is a service provided by State Farm that automatically accelerates expected HSA contributions when you do not have enough funds in your account—right at the doctor’s office or pharmacy. You can spend up to the amount State Farm has committed to depositing into your HSA for eligible expenses.

Any “OnDemand” funding used will be paid back with your future contributions in each pay period.

For details, review the HSA OnDemand overview. Questions? Check out the FAQs.

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Eligible expenses

The IRS decides what expenses can be reimbursed. Here are some examples of qualified expenses that can be paid with your HSA money:

  • Doctor visits
  • Prescriptions
  • Diagnostic tests and devices
  • Dental treatment
  • Eyeglasses, contact lenses, and exams
  • Hearing aids and batteries
  • Smoking cessation

For a detailed list of eligible expenses, visit Optum Financial. 

Paying for eligible expenses

When you enroll, you (and your eligible dependents) will receive an Optum debit card to pay your doctors, pharmacies, and other providers directly from your HSA.

Although you don’t need to submit receipts when you’re reimbursing yourself with your HSA dollars, you should save your receipts for tax purposes.

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The rules

To be eligible to contribute to the HSA:

  • You must be enrolled in the BCBSIL QHDHP.
  • You cannot have coverage through a non-HDHP or Medicare, TRICARE, TRICARE For Life, or your spouse’s employer plan. 
  • You cannot have received Veterans Administration or Indian Health Services benefits in the past three months (except dental, vision, and preventive services).
  • If you’re enrolled in the BCBSIL QHDHP, you cannot have both an HSA and a General Purpose Health Care FSA. While still taking full advantage of your HSA, your General Purpose Health Care FSA will automatically convert to a Limited Purpose FSA to pay for eligible dental and vision expenses only.
  • You must enroll in the HSA each year if you want to participate.
  • You cannot be claimed as a dependent on anyone else’s tax return.

Want another way save?

When you're enrolled in the HSA, you can also set aside additional money in a Limited Purpose Flexible Spending Account (LPFSA) to cover eligible dental and vision expenses, like cleanings, braces, glasses, and contacts. It’s a great way to save money on dental and vision costs while keeping your HSA for medical care expenses. But remember, an FSA is a use-it-or-lose-it account. You can carry over $30–$550 of your unused balance into 2027, but you’ll forfeit any balance outside of this range after the deadline.

Learn more

For more information about how the HSA can help you save money, visit Optum Financial.

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