A Health Savings Account (HSA) is a tax advantaged account used to pay health care expenses. HSAs must be paired with a High Deductible Health Plan (HDHP) and together can offer significant insurance savings and tax-exempt savings.
Another great benefit of an HSA is, unlike other health-specific accounts (like a cafeteria plan), the money deposited and the interest earned is not lost at the end of the year - it is yours to keep and use on future health-related expenses until the funds are used!
First, you need an HDHP. Your insurance provider can help you determine which plan will be best for you and if it qualifies for an HSA under IRS guidelines. Once you have chosen a qualifying HDHP, opening an HSA is as easy as opening a checking account. You can visit any one of our 13 branches to open your HSA and start saving for medical expenses.
Contributions to your HSA can be made by:
You can contribute as often as you would like up to the predetermined IRS limit. This limit is different for individual coverage and family coverage. Check with your insurance agent or the IRS for the current year contribution limits.
All Bank of Utah HSAs come with checks, a free Visa debit card, and free Internet Banking and online bill pay.
Bank of Utah will send you a 5498 SA form with a report of contributions and a 1099 SA form with a report of distributions from the HSA annually. You must file form 8889 as part of your annual tax return to report the amount of distribution used for qualified health care expenses.
If you use funds from your HSA for a non-qualified medical expense, you will be subject to tax on the amount of the distribution and a 20% penalty tax. The penalty tax can be expensive, so contact your insurance provider if you are unsure if a payment is qualified.
|Used for out-of-pocket health expenses||X||X|
|Employee contributions allowed||X||X|
|Employer contributions allowed||X||X|
|Employers receive deductions for payments||X||X|
|Works with any health plan||X|
|Unused balance rolls over annually||X|
|Investment options with tax-free growth||X|
|Portable for consumer||X|
|Funds can be used for any purpose after age 65 or if disabled||X|
For additional information and details on Health Savings Accounts, High Deductible Health Plans, and other insurance options, contact your health insurance provider or visit the IRS web site.