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Health Savings Account Q&A

What is a Health Savings Account?

HSA accounts were designed to help individuals/families defer the out of pocket expense when they are covered by a High Deductible Health Plan (HDHP). An HDHP is defined has having a higher annual deductible than typical health plans, and a maximum limit on the sum of the annual deductible and out-of-pocket expenses. Out-of-pocket expenses include co-payments and other amounts, but do not include premiums. HSA accounts offer tax benefits for contributions and distribution (when used for qualified expenses).

How do I determine if I am eligible?

In order to qualify for this type of account there are requirements that have been set by the Internal Revenue Service. A customer must meet all four of the follow qualifications:

  • Have a high deductible health plan on the first day of the month
  • Have no other health coverage
  • Not enrolled in Medicare
  • Cannot be claimed as a dependent on someone else's tax return

What are the contribution limits?

2018 HSA Contribution limits are as follows:

Standard Limits
Self only: $3,450 - over 55     $4,450

Family: $6,900 - Over 55    $7,900


Catch-up Contribution amount2 $1,000 (Catch-up contribution are offered to those that are age 55 or older)

Subject to cost-of-living adjustments (COLAs).

A note of caution: because both your employer and you can make contributions to your HSA Account it is imperative to remember your contribution limit in order to avoid penalties for having an "excess contribution".

Note: contributions limits are set by IRS and are subject to change.

What is the advantage of having a HSA Account?

HSA Accounts receive tax benefits, such as contributions, whether completed by you the customer and/or your employer; in turn, lowering your taxable income and the distributions that are used for qualifying expenses are tax free. Consult with a tax professional for guidance regarding tax implications.

HSA's offer more flexibility and convenience when paying for qualified medical expense, such as out-of-pocket expenses, deductibles, co-payments, and certain over the counter medications. Unlike the Flex Spending Accounts "Use it or Lose It", the funds continue to grow year after year. This gives you the ability to continue saving for qualified medical expenses until the need arises.

How do I make Contributions to my HSA Account?

Contributions can be made either by the individual owner and/or their employer. Fidelity Bank is capable of receiving contributions by direct deposit, over the counter deposits, mail in deposits, transfers from other institutions, automatic transfers from another in-house account, etc... All contributions are handled and reported to IRS as current year contributions unless specifically stated by you. In addition, you are allowed to make prior year contributions until April 15th (contributions of this nature require additional documentation therefore it is limited to over the counter transactions).

How do I make Distributions from my HSA Account?

Making distributions from your Fidelity Bank HSA Account is easy. You may write a check, use your HSA debit card, and/or withdraw cash from the account. Since the funds may be withdrawn for any purpose you will be responsible for determining whether they were qualified medical expenses. Please refer to IRS Publication 969 for the definition of a qualified medical expense.

How do I file HSA Contributions and/or Distributions?

All contributions and distribution are filed using IRS Form 8889. This form is strictly for Health Savings Accounts. Employer contributions include any amount an employer contributes to any HSA for you. These contributions should be shown in box #12 of your Form W-2 with code "W". Contributions made by you the customer are reported on Form 5498-SA, by the institution. Distributions are reported to the customer by the institution on Form 1099-SA.

May I have a joint owner?

IRS deems these accounts as individual ownership accounts, therefore it cannot be held jointly. Fidelity Bank allows for appointment of an authorized signer, such as your spouse. In addition to designating a beneficiary.

What happens to the account if I were to die?

Just like any account you may designate a beneficiary and the account transfers to the beneficiary. If the beneficiary is your spouse, the ownership automatically transfers to the spouse. If you name someone other than your spouse, the account ceases to be an HSA Account (an authorized signer's rights cease upon the owners death and does not transfer to their ownership).

How do I open a HSA Account?

Simply see any of our Financial Services Representatives and complete a HSA Account application.



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