Health Savings Account (HSA)

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.

Benefits

  • 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:

  1. Covered by a High Deductible Health Plan* (HDHP)
  2. Not covered under another of health insurance plan (coverage under another HDHP is allowed)
  3. Not enrolled in Medicare
  4. 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
Minimum Deductible $1,250 $2,500
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
  • Prescriptions
  • 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