Health Savings Accounts

Health Savings Accounts (HSA) were created in response to the rising health insurance premiums. It is a special account owned by an individual where contributions to the account are to pay for current and future medical expenses.

Contributions to an HSA are federally tax deductible, the earnings grow tax-deferred, and distributions for qualified medical expenses are tax-free.

You are eligible to make or receive regular contributions if, in any month, you:

  • Are covered under a high-deductible health plan (HDHP) on the first day of such month (see your health insurance agent for qualifying HDHP) 
  • Are not covered under another type of health plan that is not an HDHP (with some exceptions)
  • Are not entitled to benefits under Medicare 
  • May not be claimed as a dependent on another individual's tax return 

Contributions to HSA can be made by the employer or the individual. Maximum amount that can be contributed to an HSA from all sources is the lesser of:

  • Annual Plan deductible amount or 
  • Maximum specified in law (indexed annually)
$3,400 (individual coverage) for 2017 and $3,350 for 2016

$6,750 (family coverage) for 2017 and $6,750 for 2016

For individuals age 55 and older, additional “catch-up” contributions to HSA allowed:

$1,000 - 2016/2017 

Other resources: US Department of the Treasury 

For more details, contact a Personal Banker at 608-824-3200.