Health Savings Account
Who knew Johnny would leave his favorite toy car at the bottom of the stairs? A trip to the ER and a knee-high cast later, you do. Life happens, and sometimes so do medical bills.
With a Health Savings Account (HSA) you can plan ahead and save tax-free for qualified medical expenses. Designed to work with a high deductible health plan, you can regularly set aside money in an HSA, so it's there when you need it. Plus, you own it, so it's not a use it or lose it thing.
- No setup or annual fees
- Reduce your income tax*
- Earn greater dividends than regular savings
- $500 minimum balance to earn dividends
- Dividends compound monthly
- Withdrawals are tax free when used for qualified medical expenses**
- Money rolls over year-to-year automatically
- No "use it or lose it" policy
- HSA is owned by you, not employer
- Easy withdrawal access by check, debit card, online, teller
- $5 minimum deposit to open
- Federally insured by NCUA
*Direct deposit from your paycheck will reduce your taxable earnings. If contributions are made after income was taxed, the amount deposited is tax deductible. Consult a tax advisor.
**Withdrawals for non-qualified medical expenses are subject to income tax and a 10% penalty. The 10% penalty is waived for persons 65 and over or who have become disabled.
- Must be covered under a qualified, high deductible health plan
- Cannot be covered by another health plan that is not a high deductible health plan
- Cannot be claimed as a dependent on another person's tax return
- Cannot be enrolled in Medicare
Contribution limits are set by the IRS. 2016 contribution limits are:
- $3,350 for a single person
- $6,750 for a family
- A person age 55 or older may make an additional $1,000 in "catch-up" contributions