A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and your dependents. Contributions to an HSA are tax-free. Distributions not used to pay for or reimburse qualified medical expenses roll over are tax free. Distributions not used to pay for qualified medical expenses are subject to a tax penalty of 10%.
If you are eligible, you can establish an HSA in much the same way you would establish an IRA – with a qualified trustee or custodian, such as the Iowa Falls State Bank. If you meet the eligibility requirements, you, your employer, your family members and any other person (including non-individuals) may contribute to your HSA.
Eligibility requirements for HSAs are:
- You must be covered by a health plan with a minimum deductible of $1,350 for individuals or $2,700 for families.
- Your annual out-of-pocket expenses (including deductibles and co-pays) cannot exceed $6,650 for individuals or $13,300 for families.
Your Contribution limits are
- 2017 ~ $6,750 Family or $$3,400 Single
- 2018 ~ $6,900 Family or $3,450 Single
- $1,000 catch-up contributions for anyone 55 years or over.
Variable interest rate: (rate as of 07/09/2018)
- 2.27% APY for balance under $5,000
- 3.27% APY for balance over $5,000
APY = Annual Percentage Yield
Just like IRAs, there are contributions, catch-up limits, and deadlines each year.
A Health Savings Account can help you take more control over your health care expenses and save on taxes. An Iowa Falls State Bank Personal Banker would be glad to visit with you to find out if you are eligible for an HSA.