Business AccountsHealth Savings Account
A Health Savings Account (HSA) is a tax-advantaged account that can be established by eligible individuals covered under a high-deductible health plan to save and pay for qualified medical expenses. Examples of qualified expenses include co-pays, hospital visits, prescriptions and certain non-prescription drugs, and some insurance premiums such as Long Term Care insurance.
Contributions made on your behalf are fully tax-deductible, earnings are tax-deferred and distributions used to pay for qualified medical expenses are tax-free, regardless of your income.†
A key benefit of a Health Savings Account is that the contributions you make belong to you with no spending deadline. All unused contributions stay in your account, earning tax-deferred interest.
Features of the Health Savings:
- $30 annual fee
- $100 minimum deposit to open the account
- Free Visa Check Card and unlimited check writing
- Free Online Banking for viewing your account information
What is an HSA?
An HSA is money put in a special account owned by an individual to pay current and future medical expenses.
Who is eligible for an HSA?
An eligible individual is someone who is:
- Covered by a High Deductible Health Plan (HDHP).
- Generally not covered by any health plan that is not a HDHP.
- Not enrolled in Medicare.
- Not eligible to be claimed as a dependent on another person’s income tax return.
Definition of High Deductible Health Plans
A health plan is a high deductible health plan (HDHP) if the plan satisfies both an annual deductible and an out-of-pocket expense requirement.
HSA Contribution Limits:
Year | Self | Family | Catch-up (age 55+) |
2010 | $3,050 | $6,150 | $1,000 |
2011 | $3,050 | $6,150 | $1,000 |
Contributions may be made by:
- The individual.
- The employer.
- By others on behalf of the individual.
HSA Distributions
Qualified Medical Expenses are medical expenses that are:
- Incurred on behalf of the HSA owner, spouse or dependents.
- Incurred after an HSA has been established.
- Not covered by insurance.
- Paid by the HSA owner, spouse or dependent.
If a distribution is not used for Qualified Medical Expenses:
- The distribution amount will be included in income.
- A 10% penalty will be assessed; this penalty will be waived upon death, disability or attaining age 65.
Please see the terms and conditions for additional information about rates, fees and other costs.
†Consult your tax advisor regarding the tax advantages of a Health Savings Account.
