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Personal Banking

Health Savings Accounts

A Health Savings Account (HSA) works like a regular checking account and can be used to pay for qualified medical expenses; the remaining funds in the account will continue to grow tax free, year after year. An HSA is a tax-exempt trust or custodial account that you set up with a qualified HSA trustee (can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs) to pay or reimburse certain medical expenses. The HSA can be established through a trustee that is different from your health plan provider. You must be an eligible individual to qualify for an HSA.

No permission or authorization from the IRS is necessary to establish an HSA. An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual. Contributions, other than employer contributions, are deductible on the eligible individual’s return whether or not the individual itemizes deductions. Employer contributions are not included in income. Distributions from an HSA that are used to pay qualified medical expenses are not taxed.

Consult your tax professional for any information regarding a high deductible health plan (HDHP). For further information please look at the Internal Revenue Service’s publication number 969 found at:

Questions about HSAs

Contact us for more information and to speak to a customer service representative. Below are some frequently asked questions.

What are the benefits of an HSA?

There are several benefits of having an HSA, these are a few:

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040
  • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income
  • The contributions remain in your account from year to year until you use them.
  • The interest or other earnings on the assets in the account are tax free
  • Distributions may be tax free if you pay qualified medical expenses
  • An HSA is "portable" so it stays with you if you change employers or leave the work force

How do I qualify for an HSA?

You must meet the following requirements:

  • You must be covered under a high deductible health plan (HDHP)
  • You have no other health coverage except what is permitted under other health coverage, found at
  • You are not enrolled in Medicare
  • You cannot be claimed as a dependent on someone else’s tax return
  • There are minimum deductible requirements as well as maximum contribution limits. For further information please visit:

What is a High Deductible Health Plan (HDHP)?

High deductible health plans (HDHPs) can be combined with a health savings account or a health reimbursement arrangement to allow you to pay for qualified out-of-pocket medical expenses on a pre-tax basis. An HDHP has:

  • A higher annual deductible than typical health plans
  • A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include copayments and other amounts, but do not include premiums
  • An HDHP may provide preventive care benefits without a deductible or with a deductible below the minimum annual deductible.

What is considered preventive care?

Preventive care includes, but is not limited to, the following:

  • Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals
  • Routine prenatal and well-child care
  • Child and adult immunizations
  • Tobacco cessation programs
  • Obesity weight-loss programs
  • Screening services. This includes screening services for the following:
    • - Cancer
    • - Heart and vascular diseases
    • - Infectious diseases
    • - Mental health conditions
    • - Substance abuse
    • - Metabolic, nutritional, and endocrine conditions
    • - Musculoskeletal disorders
    • - Obstetric and gynecological conditions
    • - Pediatric conditions
    • - Vision and hearing disorders