HSAs are tax-favored consumer savings accounts for individuals and families covered by high deductible health insurance plans. HSAs allow for tax-deductible contributions and tax-free distributions if distributed amounts are used for qualified medical expenses.
What is an HSA?
HSAs are an alternative to traditional health insurance. These accounts can be used to battle rising medical costs, Health Savings Accounts (HSAs) are IRA-like, tax-exempt accounts in which you accumulate savings to pay for medical expenses. HSAs allow you to have lower insurance premiums (through affordable high deductible health plans) while actually decreasing your out-of-pocket medical expenses. Your HSA can be used to cover small and routine medical expenses until your deductible is met.
Who is eligible for an HSA?
Individuals covered by HDHPs (high deductible health plans) who are below Medicare eligibility age and who are not covered by any additional health plans. You cannot be listed as a dependant on someone else’s tax return. Ask a Premier Banks employee about how you can obtain a High Deductible Health Plan.
How can you benefit?
- HSA contributions by employer or employee are 100% tax deductible.
- If used for qualified medical expenses, HSA assets are never taxed.
- Unused HSA assets may be used for retirement, however, they will be subject to a 10% penalty if withdrawn before the HSA beneficiary turns 65 years of age. Assets withdrawn for non-medical reasons will be subject to income taxes.
- You own and control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer.
- Tax-free withdrawals to pay medical expenses covered under the HDHP policy, in addition to tax-free withdrawals for many medical services not covered by insurance such as dental, braces, vision, hearing aids and alternative medicines.
- Your funds grow in your account, tax deferred and you can make withdrawals penalty free at age 65.
- Your funds are portable and remain with you even if you switch jobs are unemployed, move, have a change in marital status or obtain future medical coverage.
- You decide what types of investments to make with the money in the account in order to make it grow.
Here are some of the features of Premier Banks’ Health Savings Accounts:
The account will have special Health Savings Account checks which can be used to pay for qualified medical expenses. You will receive a monthly account statement detailing all of your transactions. If you have written checks, you will receive images of the checks with your statement.
- Debit MasterCard® - A Debit MasterCard® will be available to you upon approval. This card can be used for your convenience to make qualified healthcare purchases anywhere MasterCard® is accepted.
- Interest Rates - The HSA will earn a very competitive, tax free interest rate.
- Other Services - You will have access to your HSA account balances and activity by enrolling in Premier Banks Online Banking. You also have access to your account balances and activity by calling our 24-Hour Telephone Banking service (1-800-779-2265 or 1-651-779-2900 in the Metro Area).
|Business Owners Reduce Costs
||Employees Reduce Costs
As employees become more accountable for health costs
Insulating loss ratio
Since deductibles are higher, your ratios are insulated. This results in lower renewal rates on your health plan.
Rewards health conscious employees with cost savings. Empowers employees to determine their level of Health Care, encouraging more efficient use of health benefits.
Reevaluating your health plan can add value to your bottom line. Enjoy net premium savings without increasing risk liability.
Employee’s payroll contribution to HSAs save the employers FICA Tax. Payroll is lowered by the amount the employees contribute into their savings accounts.
- Pre tax contributions
- Tax deferred growth
- Tax free distribution for medical expenses
Savings on FICA Tax
Due to pretax contributions to your Health Savings Account on a payroll deduction basis.
Employee driven savings become a benefit to the employee versus the insurance carrier.
Persons Age 55 and up can contribute a catch up amount of up to $1000 per year as of 2009.
Are HSAs right for you?
Come into any Premier Banks location to find out if a Health Savings Account is right for you. Start controlling your health care costs today! For more information on HSAs, contact us at (651) 777-7700.