Health Savings Account
Health Savings Account
A Health Savings Account (HSA) is a tax-advantaged account created for individuals who are covered under high-deductible health plans (HDHPs). Contributions are deposited into the account by the individual and/or the individual’s employer. The contributions can be used to pay for qualified medical expenses, which include most medical care such as dental and vision.1
The rules that define an HSA-eligible HDHP can be complex so check with your insurance provider or employer to see if your health plan is HSA-eligible.
Generally you are an eligible individual if you:
- Are covered under an HDHP on the first day of such month.
- Are not also covered by any other health plan that is not an HDHP.
- Are not enrolled for benefits under Medicare (generally not yet age 65).
- Are not able to be claimed as a dependent on another Individual’s tax return.
Funds can be deposited into your account in person at your local Exchange Bank or mobile deposit; through an employer contribution, or direct deposit from your payroll.
Sign up for EB Online Banking to manage your Health Savings Account and gain access to real-time transaction data, receiving updates on the fly. Enjoy facial and thumb-print recognition to log into the Mobile App and Mobile deposits among many other enhance online features.
What are the benefits of an HSA?
By choosing an HSA, there are a multitude of benefits that you can take advantage of, which include:
- No set up fee.
- Low Annual Fee: $15.00.
- FREE checks and debit card.
- No minimum balance required.2
- Unlimited EB ATM usage.3
- HSA funds carry over from year to year.
- Earns interest tax-free.4
- Ownership – your account stays with you.5
- After age 65, funds can be used for any purpose.
Frequently Asked Questions
Health Savings Accounts, or HSAs, were created to combat rising medical costs by providing an incentive for more consumers to pay “first-dollar” medical expenses. HSAs are accounts that are designed exclusively for covering medical expenses incurred by the HSA account beneficiary and his or her dependent(s).
You are an eligible individual for any month if you:
Are covered under an HDHP on the first day of such month;
Are not also covered by any other health plan that is not an HDHP;
Are not enrolled for benefits under Medicare (generally not yet age 65);
Are not able to be claimed as a dependent on another Individual’s tax return.
Purchase a qualifying high deductible health plan. High-deductible plans generally charge a lower monthly premium than low deductible plans, thus keeping more money in your own pocket.
Establish an HSA account with a qualified HSA custodian.
Set aside up to 100% of your health insurance deductible into the HSA up to the legal limits.
Use the money in your HSA account to pay for qualified medical expenses taken as you incur them, if you wish.
Actual Medical expenses, including doctor visits, prescriptions, transportation to get medical care, and dental care
Healthcare coverage when unemployed
Certain continuation-of-benefit healthcare coverage
Certain health insurance after age 65
Contributions to HSA may be 100% deductible.
Interest Earnings accumulate tax-deferred, and if used for qualified medical expenses, are 4tax-free.
If used for qualified medical expenses, HSA assets are not 4taxed.
Unused HSA assets may be used for retirement
Year-end account balances stay in your HSA account to be used for future years medical expenses.
1Qualified medical expenses are listed in the IRS’ Publication 502.
2$25.00 Minimum required to open account.
3Additional account related fees or service charges may be assessed based on how you use the account, ask for more details.
4Be sure to consult with a tax advisor regarding your HSA deductions and how to claim tax-free HSA distributions.
5Changes in your Health Care Coverage could impact contributions you can make to your HSA. Rates Subject to Change.
