Health Savings Accounts

Health Savings Accounts – HSAs

HSAs are interest-bearing savings tools with many features similar to IRAs, but give your employees the opportunity to pay their medical expenses with tax-free money. Employees generally are eligible for an HSA if they are covered by a high deductible health plan (HDHP), not covered by any other health plan (with limited exceptions), not enrolled in Medicare, and not eligible to be claimed as a dependent on another person’s tax return. Please consult your tax advisor for additional tax information.

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High Deductible Health Plans

A High Deductible Health Plan (HDHP) is HSA-compatible and is an affordable approach to health care for many employers and their employees. HDHPs have higher deductibles and out-of-pocket expense limits than traditional health plans, but cost less, and give employees more control over their health care costs. Under HDHPs, insured individuals generally pay the expenses for more simple medical procedures, but the plan covers the bulk of higher cost emergency or complex medical procedures. An HDHP is HSA-compatible if it satisfies the annual deductible and out-of-pocket expense requirements.

Using the HSA

HSA owners have complete ownership and control of their HSAs and can take their money out at any time. HSA distributions are only tax-free, however, when used to pay qualified medical expenses for the HSA owner, a spouse and any dependents, as permitted under federal tax law. If not needed for medical expenses, the HSA assets can be saved for retirement. Otherwise, HSA distributions not used for qualified expenses can be subject to income tax and IRA tax penalties.

HSA/HDHPs are not for everyone, but with the rising cost of health care and health insurance, they are becoming a viable solution for more and more people. Consult with an attorney or a competent business advisor to determine if the HSA/HDHP alternative is right for your business.
HSAs at NuMark Credit Union

There are no fees to open an HSA at NuMark Credit Union and they come with a Visa Debit Card for your convenience.