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Health Savings Accounts

A Health Savings Account (HSA) helps you take control of your health care expenses by allowing you to set aside tax free funds to pay for qualified medical expenses.

  • No set-up fee
  • $2.50 monthly service charge
    (requirement of $2500 daily balance to waive monthly service fee)
  • Can be opened and ongoing contributions can be made at any branch location
  • HSA to HSA rollovers permitted
  • Free HSA debit card
  • HSA Checks
  • As little as $1,000.00 can earn interest

Learn more about current rates and how to apply today.

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What is a Health Savings Account?

A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and your dependents.

Am I eligible for an HSA?

You are eligible for a regular HSA contribution if, with respect to any month, you:
  • Are covered under a qualified high-deductible health plan (HDHP);
  • Are not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventive care and limited types of permitted insurance and permitted coverage);
  • Are not enrolled in Medicare; and
  • Cannot be claimed as a dependent on another person's tax return.

What are an HSA owner's responsibilities?

If you are eligible, you can establish an HSA in much the same way you would establish an IRA-with a qualified trustee or custodian. Each year, you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distributions.

Determining your eligibility to establish an HSA and determining your allowable contributions and distributions may require the guidance of a tax or legal professional. Your HSA custodian/trustee is not responsible for the determination of your allowable HSA contributions or whether you have qualified medical expenses.

Who can contribute to my HSA?

If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person (including nonindividuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.

How much can I contribute to my HSA?

The maximum annual contribution amount is generally the lesser of 100 percent of the annual deductible under the qualified HDHP or a specified amount.*

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. The chart that follows shows the contribution limits.

Contribution Limits
Standard Limit
Tax Year
Self-Only Coverage
Family Coverage
Additional Catch-Up Contribution Amount

What are the federal tax benefits of an HSA?

Contributions to an HSA are fully deductible, the earnings grow tax deferred, and distributions for qualified medical expenses are tax free. Consult with your tax or legal professional for guidance.

How do I claim the federal tax deduction for my HSA contribution?

You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes.

When is the contribution deadline for funding an HSA?

The deadline for regular catch-up HSA contributions is your federal income tax return due date, excluding extensions, for that taxable year. The due date for most taxpayers is April 15.

How are HSA distributions taxed?

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 10 percent tax unless made after your death, your disability, or your attainment of age 65.

HSA custodians/trustees are not required to determine whether HSA distributions are used for qualified medical expenses.

The qualified medical expenses must be incurred generally only after the HSA has been established.

How is HSA activity reported?

Each year, your HSA custodian/trustee reports to the IRS on IRS Form 5498-SA the contributions made to your HSA and on IRS Form 1099-SA any HSA distributions you take. In addition, you file IRS Form 8889, Health Savings Accounts (HSAs), as part of your federal income tax return to show your HSA contribution and distribution activity.

What happens to my HSA in the event of my death?

Spouse Beneficiary
If your spouse is the beneficiary of your HSA, the HSA becomes his/her HSA.

Nonspouse Beneficiary
If your beneficiary is not your spouse, the HSA ceases to be an HSA as of the date of your death. If your beneficiary is your estate, the fair market value of the HSA as of the date of your death is included as income on your final income tax return. For other beneficiaries, the fair market value of your HSA is included as income for the recipient in the tax year of your death.

*Please check with your agent. **Maximum contribution limit.

This page provides general HSA rules and contributions limitations. It does not reflect any legislative or regulatory changes since then.

This page is intended to provide general information concerning only the federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or undo your state tax laws.

For specific information, you are encouraged to consult your tax or legal professional. IRS Publication 969, Health Savings Account and Other Tax Favored Health Plans, the instructions to IRS Form 8889, and the IRS's web site, www.irs.gov, may also provide helpful information.

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