Heath Savings Account
Hiawatha National Bank offers a great new financial tool to help with the high cost of healthcare - a Health Savings Account (HSA). It is a great way to save money for future health related expenses.
If you have a high-deductible health insurance policy but need help with the day-to-day medical expenses like prescriptions and office visits, a Health Savings Account could be for you. A HSA is a lot like an IRA, where you can save money in a tax-deferred manner to take care of future expenses. The primary difference is that funds used for qualified medical expenses are never taxed! Additionally, Hiawatha National Bank can set up your HSA so that money is transferred into the account automatically every month. No stress, no hassle. Just a plan to help you and your family save for unforeseen medical expenses.
Unlike a Flexible Spending Account (FSA), if you don't use the money in your HSA by the end of the year, no problem! The balance simply rolls over and becomes available for the following year. You can continue adding money to your HSA, as long as you are covered by a high deductible health plan.
Visit us today to discuss how a Health Savings Account can work for you.
Who can qualify for a Health Savings Account?
If you are covered by a high-deductible health plan (HDHP), not eligible for Medicare and can't be claimed as a dependent on someone else's tax return, you may be eligible for a HSA. Restrictions do apply, so talk to your tax professional for eligibility requirements.
How much can I contribute in a year?
You can contribute your full deductible amount up to a set amount each year. This amount is adjusted annually. Check with your Plan Administrator for the current year's limits.
How does an HSA Work?
It works just like a checking account, only for health-related expenses. You can add money to it any time, and simply write a check or use your HSA debit card for qualified medical expenses.
How many withdrawals do I get a month?
Withdrawals are limited to the balance in your account.
How do I know if I qualify?
Check with your Plan Administrator for qualification limits or contact your tax professional.
What is a qualified medical expense?
- Actual medical expense including doctor visits, prescriptions, over-the-counter drugs, transportation to get medical care, and dental care
- Long-term care insurance
- Healthcare coverage when unemployed
- Certain continuation of benefit healthcare coverage
- Certain healthcare insurance after age 65
Note: Prior to age 65, use of HSA funds for nonqualified medical expenses are subjected to tax and a 10% penalty.
What if I don't use the money in my HSA?
After the age of 65, unused HSA funds can be used for retirement. Unless used for qualified medical expenses, funds distributed will be subjected to income tax.