PERSONAL BANKING

HEALTH SAVINGS ACCOUNTS (HSAs)

Health Savings Accounts, or HSAs, were created by Congress to combat rising medical costs by providing an incentive for more people to pay “first-dollar” medical expenses.
An HSA is an IRA-like account designed exclusively for covering medical expenses incurred by the HSA account beneficiary (the person who establishes the account)
and his or her dependents.

WHAT ARE THE BENEFITS?

HSAs can provide significant tax benefits to eligible individuals. Not only do they provide benefits related to qualified medical expenses, they may also provide benefits similar to many tax-favored retirement plans.

• Contributions are excluded from income
• Earnings are tax-deferred
• If used for qualifying medical expenses, assets are never taxed
• Unused assets may be used for retirement, subject to penalties until age 65
• Upon death, assets become the property of the beneficiary, to be used as his or her
  own HSA

WHAT ARE QUALIFIED EXPENSES?

To retain their tax-free status, HSA assets may only be withdrawn and used for actual medical expenses, including:

• Doctor visits, subscriptions, transportation to get medical care and dental care
• Long-term care insurance
• Healthcare coverage when unemployed
• Certain continuation-of-benefits healthcare coverage
• Certain health insurance after 65

WHO IS ELIGIBLE?

You are an eligible individual for any month if you are:

• Covered under a High Deductible Health Plan (HDHP)
• Not also covered by another health plan that is not an HDHP
• Not enrolled for benefits under Medicare
• Not eligible to be claimed as a dependent on another person’s tax return