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A Health Savings Account (HSA) is an alternative to traditional health insurance. It is an account owned by an individual where contributions to the account are made to pay for current and future medical expenses. The account is controlled by you, the owner and decisions on how to spend the money is made by you.
A 1N Bank HSA offers the following features:
- An interest bearing checking account, the higher your balance the more you earn
- Unlimited check writing
- A no fee HSA debit card to use at your doctor’s office, pharmacy or drug store
- No minimum balance required1
- Free Online Banking
- A low set up fee. The fee will be waived if having automatic deposits or direct deposits2
- Monthly e-statement detailing your account activity
For more information regarding Health Savings Accounts, visit your local branch or call 1-877-362-0100.
You are eligible for an HSA if
- You are covered by a High Deductible Health Plan (HDHP)
- You are not covered by any other health plan that is not an HDHP. Certain exceptions for preventive care and other permitted coverage due apply. Check with your employer or health care provider for other health plan eligibility.
- You are not enrolled in Medicare
- You are not a dependent on another person’s federal income tax return.
It acts as a checking account, except that it is used only for qualified health related expenses. You can add money to it at any time. Use your debit card at the doctor’s office, pharmacy, hospital or any where that you make medical purchases. Or simply write a check!
- Contributions to an HSA may be tax deductible. Consult with your tax and legal advisors.
- Withdrawals for qualified medical expenses are tax free.
- Unlike flexible spending accounts, the HSA contributions you make belong to you and any unused funds remain in your account.
- HSA’s are personally owned and are portable.
It is the responsibility of the HSA’s owner to determine if they are eligible to open an HSA and to determine if the contributions and distributions are qualified. The bank is not responsible for monitoring contribution limits or distributions. The IRS requires that adequate documentation be retained to establish qualified medical expenses.
1N Bank will report contributions and distributions to the IRS. As an owner of an HSA, you are responsible for reporting contributions and distributions to the IRS on form 8889.
It depends on how the HSA is designed. If your spouse is the beneficiary, your spouse becomes the owner of the HSA when you die. If your spouse is not the beneficiary, the HSA becomes part of the estate.
Contact your HSA Administrator for a list of qualified medical expense or a complete list of qualified medical expenses can be obtained by visiting the IRS website, www.irs.gov and downloading publication 502.
Contributions to HSAs can be made by the owner of the HSA, employer or both. All contributions are aggregated to determine whether the maximum has limit has been reached
Please keep in mind that your annual HSA contribution can not exceed the deductible of your HDHP. For 2011, the contribution limit is $3050 for single coverage (self only) and $6150 for a family. Individuals 55 and older who are covered by an HSA can make additional catch up contributions each year until they enroll in Medicare. Catch up contributions for 2011 is $1000.
Yes, the unused balance in your HSA automatically rolls over year after year. You will not lose money if you don’t spend it within the year.
Additional information on Health Savings Accounts can be found by visiting the U.S. Treasury’s web site at www.treas.gov.
1Minimum opening deposit of $50. 2 One time setup fee of $15; waived if having automatic or direct deposits. Monthly fee of $3. A $10 fee will be imposed at time of account closing.
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