Health Savings Account

During the COVID-19 pandemic, refer to the Benefits Updates webpage for relevant information.

The Health Saving Account (HSA) is a pretax savings account for healthcare costs now and in the future for individuals enrolled in the Consumer Directed Health Plan (CDHP). Payflex administers the HSA.


  • Contributions and earnings are never taxed provided they are used to pay for qualified healthcare expenses. 
  • Contributions can be invested in several fund options if the balance is at least $1,000.
  • The funds are retained, even if participants change health plans, no longer contribute, or leave Princeton. Funds are not lost, there is no “use-it-or-lose-it” rule that applies to the Healthcare Flexible Spending Account (HFSA).


  • Participants or their spouses cannot contribute to a healthcare flexible spending account (FSA).
  • Participants cannot be covered by a non-qualified CDHP medical plan, e.g., a spouse’s non-CDHP.
  • Participants cannot be enrolled in Medicare.
  • Other exclusions may apply; refer to “A Consumer’s Guide to the Health Savings Account (HSA) for more information.”
  • Participants not eligible to contribute to an HSA per IRS regulations may enroll in the HFSA.
  • Effective January 1, 2020, over-the-counter (OTC) drugs and medicines can be paid for or reimbursed without a doctor’s prescription.
  • Effective January 1, 2020, feminine care products are considered a qualified medical expense and are eligible for payment or reimbursement.

2021 Contribution Limits

  • Up to $3,600 for individual coverage
  • Up to $7,200 for employee and children, spouse, or family coverage
  • Individuals 55 or over may contribute an additional $1,000 annually

Qualified Healthcare Expenses

  • Most medical, dental, and vision care and services; prescription drugs; and premiums paid for COBRA, long-term care, and retiree medical and prescription insurance, including Medicare premiums.
  • Expenses for a civil union or domestic partner not reimbursable.
  • Complete list available in IRS Publications 969 and 502.


Most benefit-eligible employees enrolled in the CDHP may be eligible to elect this plan.


Election of or changing contribution amount of this benefit is available at any time if enrolled in the CDHP.

If there are any discrepancies between the information in this publication, verbal representations, and the plan documents, the plan documents always govern. Although Princeton intends to continue these benefits, the University reserves the right to amend or terminate these plans at any time.