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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.
- No Minimum Balance-Opening Deposit of $100.00.
- Free Visa Check Card and unlimited check writing.
- Carries a competitive variable interest rate.
- No Monthly Service Charge of $2.00 if $1,000.00 is maintained.
- Personal Check access.
- Free Online Banking and BillPay access.
- Low one-time start up fee of $10.00.
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An HSA is money put in a special account owned by an individual to pay current and future medical expenses.
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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.
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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.
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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.
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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.
† Consult your tax advisor regarding the tax advantages of a Health Savings Account.
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