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Health Savings Accounts
Health Savings Accounts
What is a Health Savings Account (HSA)?
HSAs are tax-advantaged savings accounts created by Congress to help individuals save for “qualified medical” and retiree health expenses. Combined with a high-deductible health plan, HSAs can help individuals and families get better control over the rising cost of health care, and help put health care decisions back into the hands of consumers.

Who Can Open an HSA?
Generally, an HSA is a trust account that can be established by individuals who:

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  • Are covered by a qualified, high-deductible health insurance plan,
  • Are not covered by any other health insurance that is not a high deductible plan, 
  • Are not enrolled in Medicare, 
  • Cannot have received VA Medical Benefits in the previous 3 months, and
  • Cannot be claimed as a dependent on another person’s tax return
Note: It is the individual’s responsibility to determine whether they are eligible to make contributions to an HSA.
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Why Select CoVantage Credit Union to Administer Your Health Savings Account?
  • No monthly service charge.
  • No transaction fees.
  • Attractive interest rate (click here for the current rate).
  • Low minimum balance of just $10.
  • Free VISA debit card can be used to make payments to any provider or pharmacy that accepts VISA. This card can also be used to withdraw cash 24/7 at any ATM.
  • CVCU provides a monthly statement, which summarizes your HSA transactions and simplifies record keeping. Most debit card transactions include a description of the payee, which also helps you keep track of where HSA dollars were spent.
  • HSA transactions can be viewed 24/7 using CVCU’s free Internet banking service, called e-TEX.
  • Local service. HSA questions can be handled by one of the knowledgeable Financial Service Representatives at each CoVantage location…or by contacting a Call Center Representative at the main office in Antigo.
  • HSA contributions can be made using free direct deposit, provided your employer offers this employee benefit.
Contributions to an HSA
For 2007, the maximum HSA contribution for someone entitled to make contributions for the entire year is $2850.00 for a single coverage HDHP (High Deductible Health Plan) or $5650.00 for a family coverage HDHP, regardless of the amount of the plan deductible. Age 55+ catch up contributions of $800.00 are in addition to this contribution limit.  

Individuals, their employer, or both, can make contributions to an HSA. Deposits can be made in-person, by mail, direct deposit, or using payroll deduction.

Like an IRA, each year between January 1st and April 15th, individuals can designate HSA contributions to the “current tax year” or “prior tax year.” Note: All contributions using electronic deposit, payroll deduction, or automated posting will be reported as “current year” by CoVantage Credit Union.

Tax Treatment of an HSA Account
Qualified HSA contributions are deductible for federal income tax purposes and in most states are deductible for state tax purposes. Note: The State of Wisconsin does not currently allow a deduction for HSA contributions. Dividends earned on an HSA accumulate on a tax-deferred basis. Distributions from an HSA are tax-free provided they are used for “qualified medical expenses”. Always consult a tax advisor for qualified advice regarding taxation of your account.
 
Withdrawing From Your HSA
CVCU provides a free VISA Debit Card for easy access to the funds in your HSA. You can pay for prescriptions, office visits, and other “qualified medical expenses” 24/7 with just a swipe of your HSA Debit Card. You can also make payments by calling your provider and authorizing them to take payment using the numbers on your HSA Debit Card (similar to authorizing a payment by credit card…but the funds come directly from your HSA). Note: It is the HSA account owner’s responsibility to ensure that HSA funds are used to pay for “qualified medical expenses” and to maintain appropriate records for tax purposes.

Account Balance is Carried Over
Unlike contributions to a flexible spending account, there is no “use it or lose it” provision with an HSA. At the end of each year, the balance in your HSA is carried over and can be used for medical expenses incurred in future years. HSA balances belong to the individual even if you change employers.