- Health Savings Account
With the rising costs for healthcare coverage, employers are switching to plans with higher out-of-pocket expenses. Your health, and that of your dependents is uncertain, and healthcare expenses can be a major burden. Get ahead by saving for these expenses with an AFFCU Health Savings Account (HSA).
A Health Savings Account works just like a dividend-earning checking account where the money you save earns interest and can be withdrawn at any time for health expenses. You can access and spend funds at any time by check, HSA debit card, ATM, or at a branch.1 Your balance stays in the account and grows tax-deferred.
- You control your health care dollars. You decide how you spend your money with an HSA.1
- Save for future medical expenses. You can use your HSA funds today or save them for future medical expenses.
- Your money never expires. Any funds contributed are yours to be used for qualified medical expenses now and in the future. They never expire or go away, even if you change jobs or become unemployed.
- You get tax advantages. With a HSA your money grows tax-deferred and can be withdrawn tax-free for qualified health care expenses. Make tax-deferred contributions through direct deposit from your paycheck.2
Whether you currently have health expenses or are lucky to have a healthy lifestyle, an HSA is smart solution to set money aside for any health care expenses.
Why Choose An AFFCU Health Savings Account:
- Interest paid on account balance
- NO minimum to open
- NO minimum balance requirement
- NO monthly maintenance fee
- NO per check charge
- FREE Visa® Debit Card1
- FREE Use of AFFCU and CO-OP ATMs1
- FREE Online and Mobile Banking with Bill Pay1
- Low $10 setup fee
- Federally insured by NCUA
See our Account Disclosures or Schedule of Charges for additional details.
Interest rates may change without notice. Fees may reduce earnings on this account.
1Funds can be accessed for free at any time for any health and medical related expenses. However, if funds are withdrawn for reasons other than qualified medical expenses, the amount withdrawn will be included as taxable income, and is subject to a 10% penalty. AFFCU does not determine qualifying expenses. Save all receipts to prove eligibility to IRS.
2Consult a tax advisor.
- HSA Details
Funding Your HSA
Contributions can be deposited to your HSA from several sources. As the account holder, you reap the tax benefits of all deposits made.
- Employer Contributions: Your employer may elect to contribute funds to your account on a pre-tax basis. Amounts are determined by your employer from year to year.
- Payroll Deduction/Direct Deposit: Pre-tax contributions may be deducted from your paycheck and deposited directly into your HSA account.
- Catch up Contributions: Those age 55 and older are eligible to contribute additional funds above the annual IRS limit, up to $1,000.
- Personal Funds: You may deposit personal funds to your account. Such deposits are completed on a post-tax basis and then are deducted on your Federal 1040 tax filing to achieve pre-tax status.
- Annual Contribution Limits:
- Individual (self) $3,350
- Family (Self + at least one other person) $6,750
Paying For Healthcare
You will receive an AFFCU HSA VISA debit card after opening an account. Simply present your AFFCU HSA VISA debit card to complete qualifying transactions:
- At the Doctor's Office to pay any necessary visit and/or service expenses.
- At the Pharmacy to pay for a prescription.
You may use your HSA debit card to pay for qualifying medical expenses, just as you would with a normal debit card tied to your checking account, as long as funds are available in your account. If you incur expenses and your balance is not large enough to cover the cost, you can reimburse yourself for any out-of-pocket medical expenses once your balance increases.
Qualified Medical Expenses
Your HSA funds are available to pay for qualified medical expenses. Those expenses the IRS has determined to be "qualified" are listed in Publication 502 and defined in IRC Section 213d.
Examples of qualified medical expenses payable from your HSA:
- Health insurance deductible and co-insurance payments
- Physical examinations
- Prescription drugs
- Dental care
- Vision care
- Chiropractic care
- Medical Equipment
As of January 1, 2011, HSA funds may not be used for over-the-counter medications (except Insulin) without a doctor's prescription.
Important Tax Information
Keep Your Receipts: The IRS requires that you keep your receipts for HSA account expenses. While you can track your expenditures online, the receipts will be required should you ever be audited by the IRS.
Keep your receipts with your annual tax file. Failure to retain receipts could result in required payment of taxes and a 20% penalty if expenses cannot be confirmed as "qualified" expenses.
Tax Reporting: Because your HSA funds are tax advantaged, there are some reporting requirements for the IRS at tax time. You will receive a Form 1099-SA and a Form 5498-SA from the account custodian each year which should be kept in your tax file.
As an HSA account holder, you must submit Form 8889 with your Form 1040 tax filing, reporting information related to your HSA. See the following page for more information about this online feature.
If you contribute to your account through employer payroll deduction, or if your employer contributes to your account, such contributions will be reflected on Form W-2 provided by your employer each year.
For more information regarding Health Savings Accounts, visit www.IRS.gov.
- HSA Eligibility
A Health Savings Account is available to any individual under age 65 who is not covered by Medicare and buys a qualified high deductible health insurance policy. Any high deductible insurance policy qualifies, as long as it meets IRS requirements.
- Covered under a High Deductible Health Plan (HDHP) with minimum annual deductibles of
- $1,300 for self-only coverage
- $2,600 for family coverage
- You are not covered by any health plan that is not an HDHP
- You are not enrolled in Medicare
- You are not eligible to be claimed as a dependent on another person's tax returns