the SUMMIT FEDERAL CREDIT UNION

Health Savings Account (HSA)

An “Health Savings Account” or HSA is a tax-exempt solution for saving money for medical expenses when you have a High Deductible Health Plan (HDHP). It’s a great way to stay on top of rising health care costs while maintaining access to your funds and enjoying the benefit of tax-deferred savings. (See your Human Resources department if you have questions about whether your medical insurance is an HSA compatible health plan.)


Q: What kind of medical expenses does an HSA help pay for?
A: You may use your HSA to pay for qualified medical expenses as well as deductibles, co-pays at doctor offices, prescriptions, plus vision and dental care.


Q: Is an HSA similar to an FSA (“Flexible Spending Account”)?
A: No. HSA’s have unique features designed to encourage consumer-driven healthcare. Also, unlike an FSA, there is no “use it or lose it” rule. Your HSA balance rolls over from year to year, allowing you to save for future medical expenses.


Q: Are there tax benefits to HSA’s?
A. Yes. Your contributions to an HSA are tax-deductible (including any after-tax deposits), earnings grow tax free and distributions for eligible medical expenses are also tax free. Contributions to your HSA can be made with pre-tax dollars (i.e., payroll deduction through your employer), which reduces your taxable income. In reality, an HSA provides triple tax savings by reducing Federal, State and FICA taxes. Consult your tax advisor regarding IRS rules and regulations for Health Savings Accounts.


Q: If I leave my present employer, do I lose the money that remains in my HSA account?
A: No. Your HSA is completely portable and your money rolls over year to year. You can always take the funds with you even if you change jobs, become unemployed or change your medical coverage.



Q: So there’s no “use it or lose it” worries like with a Flexible Spending Account (FSA)?
A: That’s right. With an HSA, you don’t have to worry about losing the funds if you don’t use them all during the year.


Q: Can I roll over unused funds from an FSA or a Health Reimbursement Account (HRA)?
A. Yes. Regulations allow you to roll over unused funds from an FSA or HRA on a one-time basis. Please talk to your employer or third-party administrator for more details.


Q: Can I transfer funds from an IRA to my HSA?
A. Yes, regulations allow a one-time rollover from an IRA to an HSA, up to the annual HSA contribution maximum. Please consult your tax advisor to discuss the benefits and tax reporting requirements prior to transferring funds.


Q: Can I transfer funds from an existing HSA into my Summit HSA?

A: Yes, please contact your financial institution and request to have the funds sent over to The Summit.


Q: What happens if I want to withdraw money for non-medical expenses after age 65?

A: After age 65, funds can be withdrawn for non-medical expenses without penalty. However, you would still be responsible for income taxes on the funds.


Q: Can someone else have access to my HSA?

A: Yes. You can have one other “authorized signer.” You will just need to sign an authorization form.


Q: How much can I contribute to an HSA per year?
A: See the chart below for the IRS contribution limits which may change year to year:


 

 

 

 

 

 



Q: Do I have to be a Summit member to open an HSA with the credit union?

A: Yes. Being a member is a requirement of having an HSA with The Summit.



Q: What are the features and benefits of The Summit’s HSA account?

Your HSA will earn dividends1 and be part of The Summit’s Member Benefits Program. You also will receive a VISA® debit card2 which can be used to pay for medical expenses and withdraw funds from ATM machines, plus you’ll have FREE 24/7 Online Access to view your balances.


Q: What do I need to do to get started?
A: You’ll need to fill out the Health Savings Account Application verifying that you have an HDHP at your place of employment and then set up direct deposit into your HSA account.

1) Minimum balance of $100 required to earn dividends. 2) Subject to the IRS rules and regulations for HSA accounts.

NCUA

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