What is a Health Savings Account?

A health savings account, or HSA, is a tax-exempt trust or custodial account that allows you to save money for the purposes of paying or reimbursing medical expenses. A health savings account can help cover health care costs for you, your spouse and your dependents.

Benefits of State Bank of Chilton HSA:

  • Contributions to your HSA are tax deductible.
  • Competitive rates of interest
  • Earnings grow tax deferred.
  • Distributions to pay or reimburse qualified medical expenses are tax free.
  • Balance carries over from year to year and earn competitive interest.
  • Your HSA remains with you, regardless of change in coverage or employment.
  • You can pay for your eligible medical expenses with a checking account and/or a State Bank of Chilton Visa debit card.
  • Easily access to your HSA account balances 24/7 with State Bank of Chilton online banking
  • Conveniently pay medical expenses using Bill Pay, which allows for easy tracking of expenditures.

HSA Eligibility at State Bank of Chilton:

You must meet certain requirements to be eligible for an HSA; most importantly, you must be covered under a high deductible health plan (HDHP). An HDHP generally has lower premiums than other types of health plans, but also has higher deductibles. Until your deductible is met, you must pay for all your medical expenses-except for preventive care, which is almost always covered. Assuming your HDHP is HSA-compatible, you can use your HSA assets to pay for these expenses.

health_savings_account.jpgBesides having coverage under an HDHP, to be eligible for an HSA, you must be able to answer “No” to each of the following questions:

  • Do you have other health coverage (except permitted coverage)?
  • Are you enrolled in Medicare?
  • Are you claimed as a dependent on another person’s tax return?

An HDHP is considered HSA-compatible if it satisfies the annual deductible and out-of-pocket expense limits. Check with your health insurance provider to see if your health plan meets these requirements.

High Deductible Health Plan Limits for 2017

Minimum annual deductible - Self Coverage $1,300 – Family Coverage $2,600
Maximum out-of-pocket expenses - Self Coverage $6,550 – Family Coverage $13,100


How to Fund Your HSA

HSA contributions must be made by your tax return due date and generally are tax deductible. The maximum amount you (and/or your employer) can contribute to your HSA each year depends on if you have self-only or family HDHP coverage. Also, if you attain age 55 before the close of a taxable year, your contribution limit increases by $1,000 for the annual catch-up contribution.

HSA Contribution Limit for 2017:

  • Self-Only Coverage $3,400
  • Family Coverage $6,750

If you are 55 years of age or older:

  • Self-Only Coverage $4,400
  • Family Coverage $7,750

How to Use Your HSA

You are able to withdraw money from your HSA tax-free if the money is used to pay for health related expenses and pre-qualified medical expenses permitted under federal tax law.

This includes the majority of medical expenses for your and your family, including:

  • Medical care
  • Medical supplies
  • Dental care
  • Vision Care

While the majority of medical expenses are covered with an HSA, this generally doesn’t include health plan premiums. Qualified medical expenses also include the premiums you pay for qualified long-term care insurance, health insurance when unemployed, health insurance under COBRA continuing health coverage, and certain health insurance premiums after age 65.

You can also use your HSA money for medical expenses now or in retirement. Please keep in mind that HSA distributions that are not used for qualified medical expenses will be subject to ordinary income tax regulations. In addition, a 20 percent IRS penalty tax will be incurred if funds are removed before the age of 65, unless due to death or disability.

Please contact State Bank of Chilton today to see how we can help you get started with a Health Savings Account.

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