Health Savings Account (HSA)
Consult your tax advisor concerning tax deductibility.
For more information, see IRS Publication 969.
Health Savings Accounts (HSAs) are tax-exempt custodial accounts established exclusively for the purpose of paying or reimbursing qualified medical expenses by you, your spouse or your dependents.
An HSA plan has 2 components:
This account is designed to pay for routine medical expenses and/or provide savings for the future. Money put into the account can be used either during the year or accumulated.
Allowable medical expenses are defined by the IRS and are much broader than most providers (i.e. includes dental, vision). Individuals can deduct dollars contributed to the HSA account from their gross income, resulting in tax-free medical dollars1.
You are eligible for HSA contributions if you:
Note: A spouse can have single coverage under an HSA, if they are not covered under the other spouse’s plan. The account however, is for the individual covered under the HSA qualified plan only. Your insurance provider must be able to verify that your plan is a qualified HDHP.
HSA rules are determined at the federal level. Individuals may be eligible under state guidelines (domestic partners, civil unions, etc.) for qualified health insurance coverage, but not eligible to open the savings account portion of the plan.
Additionally, a ”catch-up” contribution is available for eligible individuals who are age 55 or older by the end of their taxable year and have not enrolled in Medicare.
If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person (including non-individuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.
You can open and contribute to more than one HSA, however, the annual IRS contribution limits apply to the total amount you contribute to all your HSAs.
Transfers, deposits and inquiries may be made 24/7 through our Phone and Online Banking services.
For more information including qualified medical expenses, contact your local banker.
New contributions to an HSA may be fully deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax free1. Rollovers and transfers from HSAs, IRAs, and Archer medical savings accounts are not deductible. The deadline for regular and catch-up HSA contributions is your federal income tax return due date, excluding extensions, for that taxable year, typically April 15.
The qualified medical expenses must be incurred after the HSA has been established.
HSA distributions used exclusively to pay for or reimburse qualified medical expenses incurred by you, your spouse, or your dependents are not included in gross income.
Any other distributions are included in income unless rolled over. Distributions not used to pay for or reimburse qualified medical expenses or not rolled over are subject to an additional 20 percent tax unless made after your death, your disability, or after age 65.
HSA custodians are not required to determine whether HSA distributions are used for qualified medical expenses.
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