Health Savings Account |
A Health Savings Account (HSA) is a tax-advantaged custodial account established for an individual that is used to pay for current and future medical expenses. HSAs are similar to IRAs in that they are individual accounts that may contain several investments. Contributions are tax-deductible and earnings are tax-deferred or tax-free if used to pay qualified medical expenses not covered by insurance. |
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| Who can open an HSA? |
| Anyone can open a Health Savings Account, however, not everyone can contribute. Children cannot establish their own HSA, but individual spouses can establish a separate HSA, if eligible. |
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| Who can make HSA contributions? |
| Any individual that: |
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Is covered by an HDHP (high deductible health plan) |
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Is NOT covered by a secondary insurance plan (exceptions apply) |
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Is NOT enrolled in Medicare (can be eligible, but not enrolled) |
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Has NOT received VA medical benefits in the previous three months |
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Cannot be claimed as a dependent on someone else's tax return |
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| There are no income limits or earned income requirements concerning who may contribute to an HSA. |
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| How much can I contribute to my HSA annually? |
| It depends on if you are eligible for the entire year and on the type of HDHP you have (single or family coverage). |
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| What is a high deductible health plan (HDHP)? |
| A high deductible health plan is a plan that has a minimum deductible. This plan also has a cap on annual out-of-pocket expenses (including deductibles and co-pays). |
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| What are the advantages of an HSA? |
| Security. You are protected against high or unexpected medical bills. |
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| Convenience. Debit cards are available and issued to the HSA owner. |
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| Flexibility. You can use the funds in your account to pay for current medical expenses or save the money in your account for future needs. |
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| Savings. You can save the money in your account for future medical expenses and grow your account through investment earnings. |
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| Control. You make all the decisions about how much to put in the account, which medical expenses to pay from the account and whether to invest any of the money in the account. |
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| Portability. You keep your HSA even if you change jobs, change your medical coverage, become unemployed, move to another state or change your marital status. |
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| Ownership. Funds remain in the account from year to year. No "use it or lose it" rule for HSAs. |
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| Tax Savings. An HSA provides triple tax savings: (1) tax deductions when you contribute to your account, (2) tax-free earnings through investment and (3) tax-free withdrawals for qualified medical expenses. |
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| Open a Health Savings Account |
| If you are currently a First Credit Union member and would like to add an HSA: |
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Visit any branch or call 480-831-2645, toll free 800-732-6986 to receive and complete your HSA agreements. |
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Provide a $25 opening fee. |
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| How to Join First Credit Union |
| You may submit an online application or complete a printed application and take or mail it to the nearest First Credit Union branch. With your application you must: |
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Include a minimum $5 deposit. Provide a copy of your driver's license and a secondary form of identification. |
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You may also open your account by arranging for a payroll deduction, net pay deposit, or a direct deposit through your payroll department. |
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