FAQs

A health savings account, also known as an HSA, is like a 401(k) account for your healthcare expenses. If you’re enrolled in either the HSA Basic or HSA Plus, you can contribute money on a pre-tax basis to the account each year to pay for eligible healthcare expenses, such as doctor’s office visits, deductibles, and prescriptions. And with the HSA Plus, the company also contributes to the account each year on your behalf.

The HSA is flexible and has several advantages—many of them tax-related. Here are just a few of them:

• Pre-tax contributions – Contributions you make to the HSA are 100% tax deductible (up to the annual IRS limits) like a 401(k) or an IRA.
• Tax-free withdrawals – As long as you use the money in your account to pay for eligible healthcare expenses, the money you take out of the account is never taxed.
• Tax-free growth – In most states, interest and investment growth earnings on your account are not taxed until you use them. And if you use them to pay for qualifying healthcare expenses, they are tax-free.
• Growth potential – When your HSA balance exceeds $1,000, you can invest some or all of the amount in a variety of mutual funds (not FDIC-insured).

In addition to saving on taxes, the HSA also provides a way for you to set aside money to pay for future healthcare expenses, such as in retirement.

Yes. The IRS requires you to be enrolled in a high deductible health plan to contribute to an HSA. Both of these medical options qualify as a high-deductible plans.

The IRS establishes annual HSA contribution limits each year. For 2025, the contribution limit is $4,300 if cover You Only and $8,550 if you cover dependents under either the HSA Basic or HSA Plus plans.  

If you enroll in the HSA Plus plan, these amounts include the contribution that JCPenney makes to your account. For example, if you enroll in You Only coverage and receive the $500 JCPenney contribution, you may contribute an additional $3,650 to reach the full IRS annual maximum of $4,300.

If you’re age 55 or older, you can contribute an additional $1,000 per year to an HSA.

If you enroll in an eligible medical plan, the HSA will automatically be set up on your behalf with our plan administrator, HealthEquity, an outside financial institution. All you need to do is enroll in an eligible medical plan during Annual Enrollment and elect the amount you want to contribute to the account each year. Note: You must actively re-elect your HSA contribution amount each year—these contributions will not automatically continue from one year to the next. However, you can change your HSA contribution amount at any time throughout the year.

You can use the HSA to pay for eligible health care expenses, which include out-of-pocket expenses like doctor’s office visits, lab fees, prescription drugs, certain over-the-counter medications, acupuncture, chiropractic services, and more. For a full list of IRS-qualifying expenses, click here.

If you’re enrolled in the HSA, you own the account and any funds you have in that account. You can take the funds in the account with you and continue to contribute on your own to the HSA.

Yes. Much like a 401(k), you have control over how much money you contribute to your account and the flexibility to increase, decrease, or stop your contributions at any time.

Both accounts allow you to set aside pre-tax dollars to pay for health care expenses. There are several differences between these two accounts:

Eligibility - You must be enrolled in a high-deductible health plan like the HSA Basic or HSA Plus to contribute to an HSA. You may elect the healthcare FSA if you enroll in the Value Medical plan, PPO plan, or if you do not elect coverage.  You cannot participate in both a Healthcare FSA and an HSA at the same time.  

Company Contribution – If you enroll in the HSA Plus, JCPenney will make a contribution to your account. The Company does not contribute to the Healthcare FSA.

Access to Funds - With an HSA, you must have the funds available in your account to pay for eligible health care expenses during the year. If you don’t have the funds to cover an expense, you have the option of reimbursing yourself once funds are available in the account. A Healthcare FSA allows you to use all of your funds at the beginning of the year, if needed, and gradually pay it back through payroll deductions the rest of the year.  

Rollover of Unused Amounts – When you contribute to an HSA, any unused funds in your account continue to roll over from one year to the next until you withdraw them. If you leave the company, you can take your account with you. If you have unused funds at the end of the year in a Healthcare FSA, you cannot roll over any remaining balances, so what you don’t use each year, you will lose.

‍

IRS rules do not allow participation in both a Healthcare FSA and an HSA during the same calendar year.

Yes, once you have at least $1,000 in your account. Your account will also earn interest.

No. These accounts are completely separate and due to IRS rules, you cannot transfer funds between them.