Health Savings Account
What is a Health Savings Account?
A Health Savings Account is an account to save for future medical expenses. There are certain advantages in putting money into theseaccounts, including favorable tax treatment. Contributions to an HSA are deductible and distributions from a HSA are tax-free when used for qualified medical expenses. An individual can invest the assets as he/she wishes, and if the assets are not spent in a given year, the balance can be carried forward to a subsequent year. Unused funds are not lost at the end of the year.
Who can have a Health Savings Account?
Adults can contribute to an HSA if they:
- Have coverage under an HSA-qualified “high deductible health plan” (HDHP).
- Are not also covered by any other health plan that is not an HDHP (other types of insurance like specific injury insurance or accident, disability, dental care, vision care, or long-term care insurance are permitted).
- Are not enrolled in Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
Our HSAs do not have an annual maintenance fee and offer the following benefits:
- Flexibility. Money in the account can be used to pay for any qualified health expense permitted under federal tax law including most medical, dental, and vision services.
- Tax Savings. HSAs also provide tax deductions when you contribute to your account, tax-free earnings on your account, and tax-free withdrawals for qualified medical expenses.
- Control. You make all the decisions about saving for current or future medical expenses and when to make withdrawals.
- Portability. You can continue to use the HSA even when changing jobs or medical coverage, becoming unemployed, changing marital status, or moving to another state.
- Safety. HSA funds are federally insured by the National Credit Union Administration.
You must have an HSA-qualified “high deductible health plan” and meet other requirements to open and contribute to an HSA.
For specific information on EFCU’s HSA program, call EFCU at (812) 424-2621, or send us your question via e-mail. For general information on HSA plans, visit the U.S. Department of the Treasury’s HSA Web page.Come in to any of our 3 locations to open your HSA today!