HSAs are tax-sheltered savings account similar to an IRA but earmarked for medical expenses. Contributions may be tax deductible. Funds on deposit earn tax-free interest and distributions are tax-free when used for a qualified medical expense.
- Earnings are tax-free when used for a qualified medical expense
- Free to open and no monthly maintenance fees
- No minimum balance requirements
- Unlimited transactions and check writing
- Free phone and online banking
- At age 65, you can withdraw from your HSA for any purpose (not just medical) subject to normal income taxes
Who Can Contribute?
The HSA account holder must satisfy four requirements:
- Covered by a High Deductible Health Plan* (HDHP)
- Not covered under another of health insurance plan (coverage under another HDHP is allowed)
- Not enrolled in Medicare
- Not claimed as a dependent on another person’s tax return
The best way to determine if your insurance plan qualifies for an HSA is by checking with your insurance provider.
|*2014 Definition of a High Deductible Health Plan||Single||Family|
|Maximum Out of Packet Expense||$6,350||$12,700|
Annual Contribution Limits
- $3,300 single coverage
- $6,550 family coverage
- Individuals age 55 and older are permitted to make an additional $1,000 “catch-up” contribution
What are qualified medical expenses?
HSA funds must be used for qualified medical expenses only. Examples include:
- Doctor office visits
- Vision expenses
- Dental expenses
- Long-term care insurance
For a complete listing and explanation of qualified medical expenses visit www.irs.gov and search for Publication 502.
Can I use my HSA funds for non-medical expenses?
Yes, but the funds will be subject to income tax and a 20% IRS penalty (Penalty does not apply after age 65)
How do I access my HSA funds?
Northpointe Bank provides you with three easy ways to access your HSA to pay for medical expenses:
- An HSA debit card
- An HSA check
- Stop into our branch to withdraw cash