When you're preparing for future medical expenses for yourself and your family, an HSA can be a good solution if you're currently enrolled in a high-deductible health plan. Here we'll explain the relevant details of HSAs and how they work. If you need additional information, you can speak with your healthcare provider, tax advisor or review the Internal Revenue Service's resources

Triple Tax Benefit

  • Tax-deductible contributions
  • Tax-free earnings
  • Tax-free and penalty-free distributions from qualified medical expenses

No "Use It or Lose It" Rule

You control your HSA, and it follows you whether you change jobs, change coverage or become unemployed. Your funds roll over automatically each year and continue to earn tax-free dividends.

More HSA Benefits

  • Anyone can contribute to an HSA
  • Funds can be used to pay for qualified medical expenses for yourself, your spouse or other dependents
  • Penalty-free distributions for non-qualified medical expenses after age 65

  • Must have a high-deductible health plan (HDHP)
    • Must have an HDHP on the first day of the month for which you are opening an HSA. For instance, if your HDHP coverage begins on the 15th of the current month, you may open a HSA on the following month. If you already have an existing HDHP prior to the first day of the month, you are eligible to open a HSA.
  • Have no other major medical insurance coverage
  • Not enrolled in Medicare (generally under age 65)
  • Not claimed as a dependent on another individual’s tax return

Choose from Individual or Family HSAs

  • Minimum opening deposit of $100 (no minimum balance after opening)
  • One-time setup fee of $25
  • Monthly account service fee of $1
  • HSA checks available
  • Five-tiered rate structure means the higher your balances, the higher your rate of return
  • Conveniently located branches to help with your contributions, withdrawals, check orders, etc.

Contribution limits are outlined below. Additionally, a “catch-up” contribution is available for eligible individuals who are 55 or older by the end of the taxable year and have not enrolled in Medicare.

Tax Year Maximum Annual Contribution - Standard      Additional Catch-Up Contribution for Owners Age 55 or Older Deadline to Fund
  Self-Only  Family      
2019 $3,500 $7,000   $1,000 April 15, 2020
2020 $3,550 $7,100   $1,000

April 15, 2021

 

Distributions

 

Withdrawals from an HSA are tax-free and penalty-free at any age if used for qualified medical expenses for yourself, your spouse or other dependents.

High Deductible Health Plan (HDHP)

The IRS sets annual requirements for the minimum deductible and maximum out-of-pocket expenses for HSA-compatible health plans. You can take a full federal deduction if you start your HDHP coverage no later than December 1st of that year. Please verify with your healthcare provider that your plan is compatible.

    HDHP Annual Deductible   Maximum Out-of-Pocket Expenses  
Tax Year   Self-Only Coverage Family Coverage Self-Only Coverage Family Coverage
2019   $1,350 $2,700 $6,750 $13,500
2020   $1,400 $2,800 $6,900 $13,800