FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Take control over your healthcare costs by opening a Health Savings Account (HSA). An HSA not only allows you to save money that can be used to help cover qualified out-of-pocket health costs but also has many tax benefits.
How Does An HSA Work?
- Insurance Acquisition
HSAs work with high deductible health plans (HDHPs), which are health plans with high deductibles, but generally low premiums.
- Distribution
You may receive a tax-free distribution at any time to pay for qualified medical expenses.
- Savings
The money you save on premiums, as well as other qualified contributions, is deposited, tax-free, into the account.
- Growth
The money in your account will continue to earn interest over time and can be withdrawn for any reason at the age of 65.
HSA Contribution Guidelines
For the 2024 tax year, individuals can contribute up to $4,150 and those with family coverage can contribute up to $8,300. Those over the age of 55 can contribute an additional $1,000. You can have multiple HSAs, but the total contributed must not be greater than the limits above. Multiple HSAs can be rolled into one, in which case the contribution limits no longer apply.
Contributions can come from the insureds or their employers. Once-in-a-lifetime rollovers from a Traditional or Roth IRA are also allowed but within the standard contribution limits.
There is no minimum contribution, and you do not have to contribute every year.
$4,150
individual contribution limit
$8,300
family contribution limit
$1,000
55+ additional contribution
HSA Tax Implications
You do not pay taxes on earnings in an HSA as long as they are spent on qualified medical expenses. An HSA is the only account available that offers a tax deduction today along with a tax-free withdrawal tomorrow. Be sure to consult with your tax advisor for details.
If your employer makes contributions, they will be excluded from your income and therefore may not be deducted.
You may withdraw money at any time for non-medical purposes. Before the age of 65, a 20% penalty will be assessed to the distribution. After 65, you will pay income taxes on the amount withdrawn.
HSA Allocation In The Event Of Death
When you set up an HSA, you should set up a beneficiary. If the beneficiary is a spouse, the HSA will be treated as your spouse’s after death. If your beneficiary is someone other than a spouse, the account will no longer be an HSA and the beneficiary will be taxed based on the account’s fair market value in the year of your death. If your estate is the beneficiary, the value of the account will be included on your final income tax return.
PremierBank Money Market Accounts
Looking for other ways to save money? A money market account is a high-interest savings account that also has the same ease of withdrawal as a checking account.
Contact the PremierBank Personal Banking Team
Give us a call for immediate service. If you fill out the contact form with details about what you’re interested in, a member of our team will contact you within one business day.
(920) 563-6616