HSA

What is a Health Savings Account?

A Health Savings Account allows you to pay for current health expenses and save for future qualified medical expenses on a tax-free basis. Any unused funds at the end of the plan year may stay in the account and continue to earn interest.

 
 

Who is eligible for a Health Savings Account?

In order to own a Health Savings Account, you must be covered by a Qualified High Deductible Health Plan (HDHP). An HDHP typically costs less than a traditional insurance policy thus allowing you to invest the cost savings. You cannot be enrolled in Medicare, be claimed as a dependent on someone else’s tax return or have other “first-dollar” medical coverage.

What are the tax advantages of a Health Savings Account?

A Health Savings Account provides you triple tax savings!
1. Tax deductions when you contribute to your account.
2. Tax-free earnings on the investment.
3. Tax-free withdrawals for qualified medical expenses.

 
 

How do I contribute to my account?

You can make deposits to your account just as you would any other bank account including deposits in person, transfers from another SBPC account, or direct deposits through payroll. Your employer may even make deposits to your account on your behalf. As with traditional IRA’s, you can make prior year contributions up to April 15th.

How do I use the funds in my Health Savings Account?

Your Health Savings Account will work just like a checking account. You can make purchases for qualified medical expenses using a debit card or checks. It is your responsibility to keep records of your expenditures. Once your plan year has ended, you are able to “rollover” the excess funds to be used whenever you like.

 
 

At the State Bank of Pearl City, our Health Savings Accounts are totally free!

• FREE Debit card
• FREE Online Banking Access and Bill Payment
• FREE Monthly Statements
• No monthly fee
Come on in or give Scott Helms a call and let us show you how a Health Savings Account from the State Bank of Pearl City might be just what the doctor ordered!

Who needs a Health Savings Account?

Chances are pretty good that you and your family need a Health Savings Account (HSA). Over 20 million Americans are covered by HSA-eligible insurance plans and growing by millions every year. It may be the right time to check out a valuable and affordable HSA coverage option offered by The State Bank of Pearl City.

Currently, the vast majority of health insurance plans carry a high deductible. HSAs are linked with high deductible health plans. In order to qualify, you must pay the first $1,200 in qualifying health expenses or $2,400 for families before you can start to use your insurance. Those are minimums. Most health plans can run much higher — $2,000 to $3,000 or more for individuals enrolled in group policies and almost double that for families.

That’s the bad news… the good news is, to help pay the bills, you get to contribute up to $3,050 annually ($6,150 for families) in pre-tax dollars into your HSA. For those 55 and over, you can add in another $1,000 a year. Please note that all of these amounts are adjusted each year. For the latest information on parameter amounts, visit US Treasury Resource Center.

 
 

More advantages

If you can afford it, experts advise letting your HSA balances build up. Unspent balances can rollover indefinitely year after year. These plan balances can be invested like 401(k)s, and the earnings you receive will never be taxed so long as withdrawals are spent on qualifying health expenses. Think about how nice it would be to build up a tax-sheltered nest egg to pay bills when the time comes?

Is there a downside? People who turn 65 and enrolled in Medicare can no longer contribute. However, there are exceptions to this rule — if you’re 65 and still working & covered by a private health policy, and not on Medicare, or have a spouse still working, your contributions can continue.

How do I make contributions to my account?

Deposits to your account are the same as you would with a traditional savings account. You can make an in-person deposit, or transfer from another of your State Bank of Pearl City accounts, or direct deposit through payroll. Employers can also make deposits on your behalf. All deposits made before April 15 qualify for prior year contributions.

 
 

How do I use the funds in my account?

Withdrawals work the same as writing a check. You can make purchases for qualified medical expenses using your free debit card or checks. For tax purposes it’s your responsibility to keep records of your expenditures

Stop in or give us a call to show you how a Health Savings Account at The State Bank of Pearl City and the Mount Carroll Banking Center may be just what the doctor ordered!