A Health Savings Account (HSA) gives you more control over your healthcare costs. You decide how to spend your money on your health. You make the decisions.

This new type of account has special tax advantages. 

• You may take a tax deduction on the money that you contribute to your individual HSA. 
• You can withdraw your HSA money – tax-free – to pay for a wide range of qualified medical expenses. 
• Your unused funds grow tax-deferred and can be carried over from year to year until retirement.

Easy to open, your Health Saving Account with Resource Bank offers:

• A Competitive interest rate.
• A Free Visa Debit card.
• Free specialty checks.
• No set up fees, no maintenance fees, no per check charges.

 What is an H.S.A.?

Health Savings Accounts (HSAs) are tax-exempt accounts where funds grow to pay for medical expenses.  They were created to help give control back to consumers and lower healthcare costs.  HSAs provide a financial incentive for consumers to select a High Deductible Health Plan (H.D.H.P.) HDHPs have lower monthly premiums than traditional plans.  The HSA/HDHP combination provides consumers with more incentive to shop carefully for healthcare services.  An HSA is your account.  If you switch jobs, the HSA goes with you.  Your money rolls over every year.  There is no “use it or lose it” requirement.

High Deductible Health Plans

In order to open an HSA, you must have a qualified High Deductible Health Plan.  The IRS determines the guidelines for qualified HDHPs.  The current IRS guidelines are:

Resource Insurance provides a listing of providers that offer High Deductible Health Plans.

Contributions

When you have a qualifying HDHP, the following contributions guidelines apply.

• Anyone can contribute to your HSA.
• Your contributions are tax deductible.
• If your employer contributes to your HSA that contribution is done on a pre-tax basis.
• Any pay-roll deductions made through Section 125 for your HSA are also a pre-tax basis.
• Your employer may roll over funds from your HRA or FSA account once, according to the legislative provisions.

Annual Contribution Levels for HSAs:

• You may contribute the annual maximum amount as determined by the IRS, regardless of your plan’s deductible. The maximum for 2011 is $3,050 for individuals and $6,150 for families. The maximum for 2012 is $3,100 for individuals and $6,250 for families.
• You may contribute the annual maximum amount determined by the IRS, regardless of when your coverage begins, if you maintain coverage for the 12-month period beyond the calendar year in which you first became eligible.
  • Example: if you have individual coverage that begins in November 2011, you may still contribute $3,050 for 2011 when you maintain coverage through the end of 2012.
• Catch up contribution for individuals who are 55 or older is $1,000 for 2009 and all years going forward.
• Individuals who are eligible individuals on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch up contribution, if 55 or older by year end), regardless of the number of months the individual was an eligible individual in the year. For individuals who are no longer eligible individuals on that date, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.

Minimum Deductible Amounts for HSA-Compatible HDHPs:

• For 2011, the minimum deductible for HDHPs remains at $1,200 for self-only coverage and $2,400 for family coverage.
• For 2012, the minimum deductible for HDHPs remains at $1,200 for self-only coverage and $2,400 for family coverage.

In addition, a fiscal year plan that satisfies the requirements for an HDHP on the first day of the first month of its fiscal year may apply that deductible for the entire fiscal year.

IMPORTANT! Contributions to an account for 2011 can be made until April 15, 2012.

Distributions

• You can use your money tax-free at any time for eligible medical expenses.
• When you turn 65, you can use the money for non-eligible medical expenses.  The money is subject to income tax, and there are no IRS penalties.
• If you are under age 65 and use your money for non-eligible medical expenses, you will be subject to income tax and a 10% penalty. The penalty tax for non-qualified expenses will be increased from 10% to 20% beginning January 1, 2011.