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Health Savings Account

If you have a high deductible health insurance plan, you could qualify for a Health Savings Account (HSA). HSA's are designed to help individuals and families save for qualified medical expenses on a tax-free basis. HSA's work like an IRA for healthcare. Contributions and interest are tax-free. Despite being called a savings account, a HSA is technically a checking account that earns interest.

Benefits

  • Save Money: Contributions can be tax-deductible. Distributions are tax-free if being used for qualified medical expenses. **
  • Earn Money: Offers competitive interest rates.

Highlights

Requirements

  • Low, one-time setup fee of $14.00
  • Low minimum opening deposit of $100.00
  • $3.00 monthly service charge

HSA CONTRIBUTION LIMITS

Year Self-Only Coverage If age 55 or older Family Coverage If age 55 or older
2017 $3,400 $4,400 $6,750 $7,750
2018 $3,450 $4,450 $6,900 $7,900

 

What is a Health Savings Account?

A HSA is money put in an account owned by an individual to pay for future qualified medical expenses.

How does a HSA work?

A HSA works like an IRA, except the money is used to pay for qualified health care costs. Money deposited into the account is tax-deductible and is used to pay for current and future qualified medical expenses. Interest earned is tax-deferred. Unused balances rollover from year to year.

Who can qualify?

Anyone with a high deductible health insurance plan is eligible for a HSA provided they are not covered by another health insurance plan, entitled to Medicare or can’t be claimed as a dependent on someone else's tax return.

**Health Savings Accounts are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Consult a tax adviser with questions.

 

Do you still have questions? Take a look at our blog post on HSAs or contact a Personal Banker by clicking the button below. 

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