Health Savings Account

Have You Considered a Health Savings Account?

Even with the best planning, life will sometimes throw you a curveball. And if you happen to get sick or injured, you may find that medical bills have a sneaky way of piling up. That's why opening a Health Savings Account (HSA) is one of the smartest things you can do to protect yourself and your family.

What is a Health Savings Account?

Unlike a traditional savings account, an HSA is designed to help you save for future medical expenses if you have a qualified High Deductible Health Plan (HDHP). When those medical bills start rolling in, instead of depleting your hard-earned money from your personal savings account, you can tap into your HSA, which is there to make sure your health expenses are taken care of. One helpful feature of an HSA is that you can contribute pre-tax income from your paycheck through direct deposit, and employers can make contributions as well.

Who is eligible to apply for a Health Savings Account?

Individuals can apply for an HSA if they check off these eligibility requirements:

• You have a High Deductible Health Plan (HDHP). An HDHP is a health plan that offers a higher deductible for medical expenses in exchange for a lower monthly premium.
• You cannot be claimed as a dependent on someone else's tax return.
• You are a U.S. Citizen or Resident Alien who lives and receives mail in the United States.
• You are responsible for using the HSA to pay for qualified health and medical expenses.

Employers may choose to offer a Health Savings Account to employees to help supplement their health insurance plans. As long as the employee’s plan is HSA-compatible, the HSA can apply to either health plans that are available through the employer or purchased individually.

What are the benefits of a Health Savings Account?

There are many attractive benefits to opening an HSA. Not only can you earn interest tax-free, but you have flexibility with how much you contribute and how you spend your savings. Here are a few of the popular benefits offered:

• Your HSA can save you money on taxes in three ways: tax deductions when you contribute, tax-free earnings on investments, and tax-free withdrawals for qualified medical expenses.
• Contribution amounts are flexible and can be as much or as little as you like, up to the annual contribution limit.
• You can use the available saved funds to help pay for qualified medical, dental, and vision expenses and help protect against high or unexpected medical bills.
• You can even use your funds for your dependents, even if your dependents are not covered under your HDHP.
• You can take your HSA with you if you leave your employer, switch medical coverage, become unemployed, change marital status, or even move out of state.
• Unlike flexible spending accounts (FSAs), the money in your HSA account is not "use-it-or-lose-it." Your entire HSA balance carries over from year to year.
• There is no minimum deposit required to open an HSA.

Employers offering an HSA to employees can enjoy the following benefits:

• HSA contributions are tax-deductible and can be handled directly through payroll.
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  Employer and employee can choose how much to contribute, up to the annual contribution limit.

  
  
• Employers do not have to pay payroll tax on contributions made by an employee.
• Employees own their HSA, so unused balances roll over and grow each year

Where can I open a Health Savings Account?

A Health Savings Account (HSA) from Katahdin Trust is available for individuals and employers alike. Katahdin Trust is a locally-owned and managed community bank with 16 full-service branches throughout Northern Maine, greater Bangor and Portland regions. In addition to all of the benefits an HSA has to offer, Katahdin Trust has some excellent features customers have come to expect, including:

• 24/7 access to account information
• Checks available to withdraw funds
• Free HSA branded debit card
• Free Online Banking
• Free Online Bill Pay with the ability to transfer to or from the HSA and send payments to medical providers
• Free Mobile Banking App
• Free eStatements
• Free Easy Phone Banking

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Learn more about how HSA works Reach out to a local Katahdin Trust branch BACK TO BLOG PAGE