An apple a day keeps the doctor away — but for those eventual visits, there’s the HSA. Be prepared for medical expenses with tax-advantaged savings.1
- Tax Advantages1
- Competitive Dividends
- No Monthly Service Fee
- Tax-advantaged savings for healthcare expenses1
- Earn dividends above standard savings on entire balance
- Receive higher rates on larger deposits
- An HSA provides triple tax savings:
- Tax deductions when you contribute to your account
- Tax-free earnings through investment
- Tax-free withdrawals for qualified medical, dental, vision expenses, and more
- Contributions are tax-free and can be made by you, your employer, or a third party2
- Funds can be withdrawn at any time3,4
- No monthly service fee
- No minimum balance requirements
- Unused funds remain in account year after year; no "use it or lose it" policy
- Keep your HSA in your name, regardless of career or life changes
- Free Mastercard® debit card
- Free digital banking, including:
- No minimum deposit to open
- Must be covered under a qualified, high deductible health plan
- Must not have coverage by another type of health plan
- Cannot be claimed as a dependent on another person's tax return
- Cannot be enrolled in Medicare
- Contribution limits are set by the IRS. Current 2023 contribution limits are:
- $3,850 for a single person
- $7,750 for a family
- A person age 55 or older may make an additional $1,000 in "catch-up" contributions
What's an HDHP?
A high deductible health plan (HDHP) is an alternative health insurance plan to a traditional HMO or PPO plan. As the name implies, an HDHP has a higher deductible than regular health insurance plans. This may mean more out-of-pocket expenses up front. But once the deductible is met, an HDHP typically pays for 100% of covered medical costs. So in the long run, an HDHP usually means less — often significantly less — out-of-pocket expenses.
But What About That Initial High Deductible?
That's where combining your HDHP health insurance to a health savings account (HSA) comes in. By accumulating funds in your HSA, you will have the cash needed to cover those costs. What's even better is your HSA is tax exempt.
1Consult a tax advisor.
2Pre-tax deposits can be made directly from payroll, before taxes are taken out. If contributions are made after income was taxed, the amount deposited is tax deductible.
3You can withdraw funds at any time for any purpose. However, if funds are withdrawn for reasons other than qualified medical expenses, the amount withdrawn will be included as taxable income, and is subject to a 10% penalty.
4Withdrawals for non-qualified medical expenses are subject to income tax and a 20% penalty. The 20% penalty is waived for persons 65 and over or who have become disabled.