HSA Education Center for Individuals
More and more, people are learning how Health Savings Accounts are a smart way to save for health-care costs, and how HSAs help us take control of our health care expenditures.
A Health Savings Account IS…
- A tax preferred bank account (usually checking) – this means that you put money in tax free if through payroll deduction.
- Post tax contributions can come from any number of sources, and are tax deductible when the individual files (most states, always federal – now in Wisconsin.)
- You earn interest tax free
- Money spent or “distributed” stay tax free as long as they are used for medical expenses (RXs, dental, vision, deductibles) for you OR your dependents. Note: These folks don’t even have to be on your insurance!
A Health Savings Account is NOT…
- (Typically) a “Savings” account. Health Savings Accounts are usually used for transactions, which means they have to be checking accounts
- Meant to be used for anything that is not a qualified expense (please consult with www.treas.gov for more information)
- Monitored by your bank in terms of how you spend the money
- Complicated to have or to use.
Blackhawk Health Savings Account benefits include:
- No minimum balance to open
- Fee-free enrollment at your workplace or online
- Free Debit Card, Online Banking and Bill-Pay
- Tax-free deposits, earnings and withdrawals*
- Save for future medical expenses or retirement
- Keep your HSA, even when changing jobs
- No annual "use it or lose it" rule — unspent balances stay in your account
- Money Market HSA and Self Directed Investment options are available as your balance grows
HSA Contribution Limits
Year 2014: Single - $3,300 | Family - $6,550
Year 2015: Single - $3,350 | Famiy - $6,650
- Individuals age 55 or older can make an additional $1,000 per year catch-up contribution.
- Contributions for the current year can be made until April 15 of the next year.
- Contribution information provided by the IRS.
Use the HSA Calculators to estimate tax savings, view maximum contributions, and estimate the future worth of your account.
HSA Eligibility & Account Options
- A person must be covered by a Qualified High Deductible Health Plan, or “QHDHP”
- A person may not be enrolled in and using Medicare benefits (please consult www.ustreas.gov for details)
- A person may not be claimed as a dependent on someone else’s taxes
- A person may not be covered by other medical insurance, such as that of a spouse, unless it is also a Qualified High Deductible Health Plan (Dental, Vision, and Workers Comp coverage does not effect this eligibility)
If you have questions about whether or not your coverage is “Qualified” please ask your Human Resources representative, or you Insurance Agent for details. They will be able to give you a copy of your Plan Summary Document, detailing your coverage.
When you do find out about your coverage, please contact us – we’re happy to assist!
Health Savings Account Contributions and Use
The annual amount that can be contributed to an HSA is set by federal regulations. For 2014, the maximum annual contribution is $3,300 for individual coverage and $6,450 for family coverage. If you are 55 or older, you can make a catch-up contribution of $1,000. If your spouse is 55 or older and otherwise eligible, they can also make a $1,000 catch-up contribution in an HSA of their own. Our contribution calculator can help you determine your individual maximum.
You can make deposits into your account by several methods:
- Ask your Employer to make pre-tax deposits through payroll. They will need your account number and Blackhawk Bank’s routing number: 275971854.
- If your Employer cannot make pre-tax deposits through payroll, ask if they can make post-tax deposits.
- You can set up an automatically recurring deposit – just ask us how!
You can mail a check to Blackhawk Bank, Attn: HSA Department, 400 Broad St, Beloit WI 53511.
- Make your check payable to Blackhawk Bank
- Include your account number and the contribution year
- Another funding option is to transfer funds from an existing HSA, FSA, HRA or IRA. Please call us to start the process.
Using your HSA
There are several ways you can access your HSA funds to pay for qualified medical expenses:
- Use your Free HSA debit card
- Use Free Online Bill Pay to make payment. If you don’t have Online Banking, Enroll Now.
- Reimburse yourself for purchases by getting cash at an ATM or writing yourself a check from your Free Online Bill Pay.
Write a check from your HSA checkbook
Qualified Medical Expenses:
When you pay for qualified medical expenses with your HSA, the funds you withdraw are tax-free, provided that they:
- Are qualified medical expenses and
- Have not been compensated or reimbursed by insurance or otherwise.
The following list provides a general overview of qualified and non-qualified medical expenses. These lists are not all-inclusive, and are subject to change by the IRS. Remember that any HSA dollars used for non-qualified expenses will be taxable, and will also be subject to a 20% IRS tax penalty if you are under age 65, except in the case of distributions made after your death or disability. Be sure to consult your tax advisor if in doubt about a particular expense.
This listing is taken directly from the IRS website, www.irs.gov.
The determination of a qualified expense is the sole responsibility of the IRS and not Blackhawk Bank.
Publication 502 (2010), Medical and Dental Expenses – Including the Health Coverage Tax Credit.
Publication 969 (2010), Health Savings Accounts and Other Tax-Favored Health Plans
Qualified Medical Expenses:
Excluded Medical Expenses*
See IRS website for full description of expenses. Under the Patient Protection Act, amounts paid for over-the-counter medications obtained without a prescription or Letter of Medical Necessity will no longer be reimbursable from HSAs as of 1/1/11.
HSA Tax Tools
Health Savings Accounts provide tax advantages on contributions, distributions and earnings.
- Pre-tax contributions, made through payroll by your employer, reduce your taxable income.
- Post-tax contributions are an above-the-line deduction, reducing your taxable wages when you file your federal income tax return.
- All earnings on your HSA are tax-free
- Withdrawals from your HSA, if used for Qualified Medical Expenses, are tax-free.
- When you turn 65 years of age, your HSA dollars can be spent on any expense without penalty, subject to income tax.
- Use our Blackhawk Bank HSA Calculator to see the potential tax savings.
What will I get from Blackhawk Bank?
|Monthly:||You will receive a detailed account statement either through the mail or electronically if you have enrolled for eStatements. Not enrolled? Go Green Now!|
|January:||You will receive a Fair Market Value Statement summarizing all reportable contributions and distributions for the previous calendar year.|
|January:||You will receive a 1099-SA (Distributions from an HSA, Archer MSA, or Medicare Advantage MSA) which reports the distributions made from your HSA for the calendar year. This information is also reported to the Internal Revenue Center.|
|May:||You will receive a 5498-SA (HSA, Archer MSA, or Medicare Advantage MSA Information) which reports the contributions made to your HSA for the tax filing year. This information is also reported to the Internal Revenue Center.|
IRS Resources for HSAs
Please visit www.irs.gov for more information on HSA tax reporting:
- IRS Publication 969 - This publication covers HSA eligibility, contribution limits and distribution rules.
- IRS Notices 2004-2 and 2004-50 - These notices answer specific questions regarding HSAs.
- IRS Code Section 213(d) and IRS Publication 502 - These documents list Qualified Medical Expenses for which you can use your HSA dollars.
- IRS Form 8889 – The completion of this form is required when completing your income taxes. For a breakdown of your employer (pre-tax) versus personal (post-tax) contributions, you will need to refer to your personal payroll documents (such as the W-2).
State tax laws regarding an HSA may differ. We recommend you consult your Tax Advisor if you have any questions.