Health Savings Account

Almost no one gets through life without a few bumps and bruises. By setting aside money for health care costs, you can focus on recovering from an illness or accident without worrying about medical bills.

Concerned about medical costs? Make that headache go away.

It makes sense to save for a rainy day. And for that broken arm or unexpected illness. Whether you have a family member with a chronic condition or just a crew of slightly accident-prone kids, a Health Savings Account can give you peace of mind. With no fees, dividends paid on balances, and possible tax advantages, it can also contribute to your financial well-being.

  • No monthly service charge
  • No transaction fees
  • Tiered interest rates mean that bigger balances pay higher dividends
  • Low minimum balance of just $10
  • Receive regular statements detailing account balances and activity
  • Monitor transactions with online banking and mobile banking tools
  • Free debit card allows you to make payments to medical providers and pharmacies that accept Visa

Who Should Have an HSA?

  • Generally, an HSA can be established by individuals who are covered by a qualified, high-deductible health insurance plan
  • Individuals not covered by any other health insurance that is not a high deductible plan
  • Individuals not enrolled in Medicare
  • Individuals have not received VA Medical Benefits in the previous three months
  • Individuals cannot be claimed as a dependent on another person’s tax return

Contributions to an HSA

  • Each year between January 1 and April 15, individuals can designate HSA contributions to the “current tax year” or “prior tax year.”
  • All contributions using electronic deposit, payroll deduction, or automated posting will be reported as “current year” by CoVantage Credit Union.
  • There is no “use- it- or-lose-it” provision with an HSA. Your year-end balance is carried over and can be used for medical expenses in future years.
  • HSA balances belong to the individual. Your account balance stays with you even if you change employers.

HSA Tax Treatment

  • Distributions from an HSA are tax-free provided they are used for “qualified medical expenses.”
  • The account owner is responsible for making sure funds are used for qualified medical expenses and for maintaining appropriate records for tax purposes.
  • Consult a tax advisor for qualified advice regarding taxation of your account.

Next Steps