What is an HSA?

Published: Mar 29, 2017 4:20:00 PM

What is an HSA?
You probably save for rainy days and retirement, but do you remember to save for your own health? An HSA or Health Savings Account lets you save money to spend on medical expenses, like doctor visits and prescription medication. 

How does an HSA work?
Unlike other health plans, you own this account — not your employer. So the money is yours to roll over year-to-year, and you can use the funds any time — whether it's six months or six years from now. Contributions are tax deductible* and can grow interest that is tax-free. Withdrawals are also tax free when used for qualified medical expenses.

What’s the catch?
You must be covered under a high deductible healthcare plan. You will need to work with your tax advisor (not your bank) to determine your eligibility. There is also an annual contribution limit on HSAs. For example, in 2017 the “self” contribution limit is $3,400 and the family limit is $6,750. Also, if you are 55 or older you can have an additional catch-up limit of $1,000. 

How do I spend the money in my HSA account?
You should have easy access to the funds in your health savings account. HSA account holders can order both checks and/or a debit card and there is typically no limit to the number of transactions you can have per month.

What do I need to open an HSA?
You will need your driver’s license, address (if different than your drivers license, you will need proof of that address), your social security number, your date of birth and a deposit that meets your bank’s minimum amount required. It’s also important to think about who your beneficiary on this account will be. You will need their name, address, birthdate and social security number. You can also identify an authorized signer, however, a joint owner is not allowed.

Do you have additional questions about HSAs?
Stop by The Bank of Tioga location or call (701)664-3388 to learn more about Health Savings Accounts. With a health savings account from The Bank of Tioga you can view account balances 24/7 with TBOT Online and the Mobile Money app. Even better, The Bank of Tioga does not charge any setup or maintenance fees on HSAs.

*Consult a tax advisor.