Health Savings Accounts (HSA)

A Health Savings Account (HSA) is a great way for you to save money for your healthcare costs—and help your employees do so as well.

With an HSA, the money you contribute may be tax deductible, providing a tax-free way to pay for qualified medical expenses such as:

  • Doctor’s fees
  • Dental work
  • Prescriptions

A Gateway HSA puts you and your employees in control of your own healthcare spending, even if your health insurance coverage changes. You decide when and how to use the funds in your account.

You get:

  • An FDIC-insured interest-bearing account where your money is kept
  • A tiered interest rate—the higher your account balance, the more interest you earn
  • Free ATM/debit card you can use to pay for qualified medical expenses
  • Free check imaging
  • Free online access to your account
  • Low annual fee—just $10 per year

Earnings grow tax deferred and distributions for qualified medical expenses are tax free. What’s more, any contributions you make to your employees’ accounts may not be considered income for federal income tax purposes, which means they don’t have to pay tax on that income.

There’s no minimum balance and unlike a Healthcare Flexible Spending Account (FSA), the balance carries over from year to year. Plus, an HSA can be used to cover qualified expenses for a person’s spouse and dependents.

Eligibility requirements

You and your employees may be eligible for an HSA if you:

  • Are covered under a high-deductible health plan (HDHP)
  • Are not also covered by any other health plan that is not an HDHP (with the exception of plans providing preventive care and a few other plans)
  • Are not enrolled in Medicare
  • Cannot be claimed as a dependent on another person’s tax return

 

HDHP Annual Deductible

Tax Year

Self-Only Coverage

Family Coverage

2011

$1,200

$2,400

2012

$1,200

$2,400

2013

Subject to cost of living adjustment

Subject to cost of living adjustment

 

Contribution limits and maximum out-of-pocket expenses

If you meet the eligibility requirements for an HSA, you, your business, your family members and others may contribute to your HSA. You can even deduct all contributions other than those made by your business, as long as they do not exceed the maximum annual contribution limits set by the Internal Revenue Service (IRS) each year.  The IRS also sets maximum out-of-pocket limits for expenses.

 

Contribution Limits

Tax Year

Standard Limit

Catch-up Contribution Amount*

Self-Only

Family

2011

$3,050

$6,150

$1,000

2012

$3,100

$6,250

$1,000

2013

Subject to cost of living adjustment

Subject to cost of living adjustment

Subject to cost of living adjustment

  

*HSA participants age 55 or older by the end of the tax year and not yet enrolled in Medicare can make a catch-up contribution.

 

Maximum Out-of-Pocket Expenses

Tax Year

Self-Only Coverage

Family Coverage

2011

$5,950

$11,900

2012

$6,050

$12,100

2013

Subject to cost of living adjustment

Subject to cost of living adjustment

 

To learn more about Health Savings Accounts, stop by our Mendota Heights office or call us at 651.209.4800.

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