Health Savings Accounts - HSA

What is a Health Savings Account (HSA)?

A health savings account (HSA) combines high deductible health insurance with a tax-favored savings account. Money in the savings account can help pay qualified medical expenses. Money left in the savings account earns interest and is yours to use toward future medical expenses.

  • Health insurance can cost less
  • Savings help to pay qualified medical expenses
  • Tax-deductible deposits
  • Tax-free growth
  • Tax-free medical expenses


How does an HSA work?

An HSA works in conjunction with high deductible health insurance.

Your HSA dollars can be used to help pay the health insurance deductible and qualified medical expenses, including those not covered by the health insurance, like dental and vision care.

Any funds you withdraw for non-qualified medical expenses will be taxed at your income-tax rate, plus 20% if you’re under 65.


Health Savings Account advantages:

Tax-deductible

Contributions to the HSA are 100% deductible up to the legal limit.

Tax-free

Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed.

Tax-deferred

Interest earnings accumulate tax deferred, and if used to pay qualified medical expenses, are tax-free.

HSA money is yours to keep

Unlike a flexible spending account (FSA), unused money in your HSA isn’t forfeited at the end of the year; it continues to grow tax-deferred.


Why High Deductible Health Insurance?

To get the benefits of an HSA, the law requires that the savings account be combined with a qualified high deductible health insurance plan which can cost less than other health insurance plans.

Federal law sets annual deductible, out of pocket and contribution limits.


What are the benefits of an HSA?

HSA Savings:

  • Used to pay qualified medical expenses
  • Tax deductible off of gross income
  • Grow tax-deferred
  • NEVER taxed when used for qualified medical expenses
  • Roll over year after year—no “use it or lose it”
  • Portable, go with you wherever you go

HSA Savings can also be used for:

  • Health insurance premiums when you’re between jobs
  • Qualified long-term care premiums
  • Medicare premiums and out-of-pocket expenses
  • Living expenses after age 65 (pay ordinary income taxes)


Who can have an HSA?

You must be:

  1. Covered by qualified high deductible health insurance plan;
  2. Not covered under other health insurance*;
  3. Not enrolled in Medicare; and
  4. Not another person’s dependent.

*Other health insurance does not include coverage for the following: accidents, dental care, disability, long-term care, and vision care. Workers’ compensation, specified disease,and fixed indemnity coverage is permitted.


To open an HSA:

  • Call us at (563) 355-0152 or (800) 426-5241, Ext. 1
  • Stop in to any of our convenient locations as we would love to see you!

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