HSA - HEALTH SAVINGS ACCOUNT
Build Tax-Free Savings to Pay For Medical Expenses...
What is a HSA?
A Health Savings Account (HSA) is a versatile savings account that works in conjunction
with a High Deductible Health Plan (HDHP). HSA's are tax-free, personal investment
accounts you can use to pay for qualified medical expenses.
The best part of an HSA is that you, as the account holder, has complete control over it.
- You can make an unlimited number of deposits, or contributions - so you can deposit one large sum or make smaller monthly deposits that fit within your budget.
- You don't have to spend all of the money in your HSA each year. If you deposit more than you spend, it stays in your account until you need it.
- You have the freedom to use HSA funds for qualified out-of-pocket expenses at the health provider of your choice.
- Your HSA with Morrill & Janes Bank comes with a Visa® Health Savings Check Card for your convenience in paying doctor fees, prescriptions, or other medical expense purchases.
Visit www.irs.gov for a complete listing of qualified medical expenses. Funds used from an HSA for non-qualified expenses are subject to federal taxes.
Who Qualifies For an HSA?
For 2011*: Your High Deductible Health Plan minimum deductible must be at least $1,200 for self-only coverage or $2,400 for family coverage. The annual out-of-pocket expenses, including deductibles and co-pays but not premiums, cannot exceed $5,950 self-coverage or $11,900 family coverage. Your Annual Contribution Limit is $3,050 for an individual with self-only coverage, and $6,150 for an individual with family coverage under a high deductible health plan.
HSA Contribution Limits 2011 and Historical Contibution Limits.
This table shows all the changes in limits that have occurred since 2004.
| Year | Contribution Limit (Single) | Contribution Limit (Family) | Additional Catch-Up contribution (55 or older)(Single and Family) |
| 2004 | $2,600 | $5,150 | $500 |
| 2005 | $2,650 | $5,250 | $600 |
| 2006 | $2,700 | $5,450 | $700 |
| 2007 | $2,850 | $5,650 | $800 |
| 2008 | $2,900 | $5,800 | $900 |
| 2009 | $3,000 | $5,950 | $1,000 |
| 2010 | $3,050 | $6,150 | $1,000 |
| 2011 | $3,050 | $6,150 | $1,000 |
Important: Money that is not used during a calendar year in your HSA account rolls over to the following year. This means your account balance can grow over time. Therefore, if you are already making the maximum IRA or 401K contributions, an HSA is another way to make a tax deductible contribution and allow the money to grow tax deferred, even if you don't necessarily need it to cover medical expenses.
Money withdrawn for non-medical reasons is subject to income tax in addition to a 20% penalty, similar to other IRA accounts. If you become disabled or reach age 65 the penalty no longer exists but you still have to pay income tax on the money.
For more information on Health Savings Accounts and how you can benefit, please see a Morrill & Janes Bank representative at any of our Branches, view the HSA Demo above, or visit these websites:
| When you click on one of these links you will leave the Morrill & Janes Bank website and will be connected to the IRS website. These links are provided as a convenience only. |
| Affordable Care Act: Questions and Answers |
| Amounts Received under Accident and Health Plans |
