What Is An HSA?

Healthcare image.jpegAs you’re navigating the world of health insurance you likely have encountered the term HSA. Do you know what HSA means?

HSA stands for Health Savings Account and this is an easy way for folks who have high deductible insurance to save for medical expenses and to reduce their taxable income.   If you are enrolled in a high-deductible insurance plan as defined by the government, you can qualify for an HSA. This year, to be eligible for an HSA, you must have an annual deductible of at least $1,350 for an individual and $2,700 for a family. This is set by the federal government and is subject to change in future years.

Each year you will decide how much to contribute to your HSA account although your annual contribution cannot exceed government mandated maximums. For 2018, the contribution limit for an individual is $3,450 and the contribution limit for a family is $6,900. Adults over 55 can add up to $1,000 more.

These contributions are tax deductible and the distributions are tax free when used for qualified medical expenses.

At VCNB, you will receive a debit card and a monthly statement with check images. Your first order of checks will be free and you will have unlimited checking writing. There is an initial $25 set up fee for the account. This fee will be waived for customers who present this coupon.

There is also a $3 monthly fee which will be waived for customers who select eStatements.

Want to learn more or open an HSA online? Click here and look under the Savings Accounts tab.

You can also seek more information or open an HSA in any of our seventeen locations.



Health Savings Accounts help with high deductible insurance

health savings account familyThis month we are talking a lot about the Health Savings Account or HSA. An HSA is a tax favored savings account created to pay medical expenses.

These accounts are offered to help individuals and families with high deductible health insurance plans to save money for qualified medical expenses. While this is an extremely helpful savings tool, many Americans are not familiar with this kind of account or how it works.

To be eligible for an HSA in 2014 you must have an annual deductible of at least $1,250 for an individual or $2,500 for a family

VCNB Senior Vice President Jane Nickels said that contributions to an HSA are tax deductible and withdrawals to pay qualified medical expenses are never taxed.  The money you deposit into your HSA belongs to you – not your bank, employer or the government. That money rolls over from year to year and can be used only for approved medical expenses, according to Nickels.

“Our customers tend to like the HSA because their contributions and distribution are tax free. Once it’s set up, it’s easy to use and easy to maintain,” Nickels said.

She explained that unused money in your HSA isn’t forfeited at the end of the year. Instead, it continues to grow, tax-deferred. “Best of all, the unused money that you accumulate in your HSA rolls over to the next year so you never have to worry about losing your money,” she explained.

Qualified medical expenses are defined by the Internal Revenue Tax Code and you can read a list of these qualified medical, dental and vision expenses here.

A word of caution: any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate plus 20 percent tax penalty if you are under age 65.

At VCNB, our Health Savings Accounts feature free checks with unlimited check writing, a debit card, a monthly statement, online access  and interest checking with tiered rates. There is a monthly service charge of $3 and an initial set-up fee of $25. However, if you open an HSA now through March 31, 2014 you can find a coupon here.  This coupon can be used to waive the initial set-up fee.

Do you believe an HSA is right for you? At VCNB we have Account Representatives who can help you get started! Call your local branch or 1-800-542-5004 to talk with one of our knowledgeable accounts representatives. You can also watch a short video on our website by clicking here.

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