Health Savings Accounts (HSAs)
The health marketplace continues to change rapidly, Financial products are being introduced to meet new needs, A Health Savings Account (HSA) is tax-advantaged, personal savings account that is used specifically for health care expenses.
- Deduct qualified contributions from your income taxes
- HSAs earn dividends which are tax-free
- Unlike a flexible spending account, HSA balances may be carried forward for as long as you own the account
- No set up fee or monthly service charges
When you open a health savings account at Abilene Teachers FCU, you’ll receive a debit card that is linked to that account. Use that card to pay for eligible medical expenses not covered by your health insurance plan. IRS Publication 502 contains a full list of eligible expenses.
Additional HSA Information
These are the federal qualifications for a Health Savings Account:
- Be covered by a high deductible health care plan. For 2016, this is one with a $1,300 individual deductible or $2,600 for a family
- Insurance plan must also include a high Out of Pocket Maximum. In 2016, the figures are $6,550 for an individual and/or $13,100 for a family
- Not be covered under a second health insurance policy
- Be below the age of 65
- Not enrolled in Medicare
- Not claimed as a dependent on another person’s tax return
Members meeting those requirements are allowed annual contributions of $3,350 for an individual HSA or $6,750 to a family account. Those over age 55 are allowed to contribute an additional $1,000 per year. Funds can be deposited through a payroll deduction plan with your employer or can be made personally.
Should HSA funds be withdrawn for ineligible expenses, they will be subject to taxation at your regular tax rate plus a 20% penalty if you are below the age of 55.
Health savings accounts are unfamiliar and can seem intimidating. We’re here to answer your questions. Please contact a Member Services representative to learn more.
Additional resource – U.S. Treasury HSA web page.