Health Savings Accounts

Home Deposit Accounts Health Savings Accounts

The Health Savings Account with Exchange State Bank is a great solution for individuals or families looking to plan for the future when it comes to medical expenses.  Contributors to the Health Savings Account may include the account holder, their employer, or both, with savings available to use on qualified medical expenses for the account holder, their spouse and/or any dependents of the account holder.

Health Savings Account Eligibility

The Health Savings Account holder is required to be:
  • Covered under a high-deductible health plan (HDHP) on the first day of the month.
  • Minimum deductible for tax years 2013 for individual HDHP coverage is $1,250 with a maximum out-of-pocket expense limit of $6,250.  The minimum deductible for family HDHP coverage is $2,500 with a maximum out-of-pocket expense limit of $12,500.
  • Not covered under another type of health plan that is not an HDHP (with some exceptions).
  • Not enrolled in Medicare.
  • Cannot be claimed as a dependent on another individual’s tax return.

Pay Medical Bills Tax-free

If you meet eligibility requirements, you can pay qualified medical bills tax-free.  Qualified medical expenses include dental care, vision care, prescription drugs and more for you, your spouse and your dependents.  Pay by check or debit card with no minimum balance or fees required.  Withdrawals for qualified health care expenses are not taxed and you also earn tax-free interest on the funds in your Health Savings Account.  Health Savings Account funding will also roll over from year to year.

Reduce Taxable Income

By adding tax-deductible funding into your Health Savings Account from either yourself or your employer, you reduce your income and in turn lower your taxes.  For the year of 2013, the Health Savings Account holder will determine the maximum contribution limit based on IRS Code specifications of $3,250 for self-only coverage or $6,450 for family coverage.  If you are turning age 55 by the end of the taxable year, but are not yet 65, you may make an additional “catch-up” contribution of $1,000.
 
For questions on how to start a Health Savings Account, contact Exchange State Bank today!