Health Savings Account (HSA)
A Health Savings Account (HSA) from 3Rivers can help you save or pay for current/future health expenses using tax-free dollars. An HSA is a special savings account available to 3Rivers members who have High-Deductible Health Plans (HDHP) for their health insurance coverage. It allows you to enjoy tax benefits on the money you save to pay for healthcare expenses.
The process is simple. Once you open your account, you simply make contributions yourself or through a plan offered by your employer. The funds in the account can be accessed using a special HSA debit card, a check or even through online bill pay. The contributions you deposit into your HSA are not subject to any tax as long as the funds are used for medical expenses. Any funds used for non-eligible expenses could be taxed and a penalty could be assessed.
There are specific limits to the amount of money that can be contributed into an HSA each year, with a special catch-up contribution available to individuals 55 years and older. However, funds that are not used each year will roll over and remain invested in the account.
With a Health Savings Account, individuals can decide:
- How much to contribute
- Whether to pay for current medical expenses from the account or save the account for future use
Business Owners: Can 3Rivers Health Savings Accounts help your employees?
With changing healthcare legislation, all companies can benefit from a comprehensive healthcare insurance plan including a 3Rivers Health Savings Account. By having a solid plan for your team, you can reduce your insurance costs and encourage employees to use their healthcare funds in ways that will lower their costs and prevent serious health emergencies
* 3Rivers does not sell insurance or give advice on insurance plan coverage or tax deductions.
Benefits of switching to an HSA/HDHP Healthcare Program:
- HSA deposits are pre-tax or tax-deductible
- Qualified withdrawals are tax-free
- Unused HSA contributions remain in the account from year to year
- Portability allows HSA owners to keep 100% of funds if job changes
HSA Debit Card: You will receive a 3Rivers HSA Debit Card to make qualified healthcare purchases. Regular debit card transaction fees will apply, and purchases will be automatically deducted from your HSA. An additional debit card can be issued for a second signer on your HSA.
Checks: Checks are available for you to pay qualified healthcare expenses.
Dividend Rates: Your account will earn dividends on a tiered schedule based on balance. For more information, see the rates table below.
Online Access and Bill Pay: You will have access to view your account balances, activity, and check images by enrolling your 3Rivers HSA for online access. You will also be able to pay medical expense bills with your HSA through Online Bill Pay.
Member Service: To provide you with the best service possible, you can call our Member Relations Center at 1-800-825-3641, Option 1, for answers to your Health Savings Account questions.
Individuals with no other first-dollar medical coverage (see definition below) are eligible to contribute to an HSA if they have a qualified high-deductible health plan. Your insurance professional will help you determine whether your plan is an HSA qualified plan. The amounts listed below are indexed annually.
- Individual High-Deductible Health Plans (2017) – Minimum deductible of $1,300 with a $6,850 cap on out-of-pocket expenses
Individual High-Deductible Health Plans (2018) – Minimum annual Deductible: $1,350- Maximum annual deductible and other out-of pocket expenses* $6,650
- Family Plans (2017) – Minimum deductible of $2,600 with a $12,900 cap on out-of-pocket expenses
Family Plans (2018) – Minimum annual deductible: $2,700 - Maximum annual deductible and other out-of-pocket expenses* $13,300
“No other first dollar medical coverage” means individuals are ineligible for an HSA if they also have coverage through another non-HDHP medical plan, including Medicare or a spouse’s non-HDHP plan or Flexible Spending Account.
Use of VA benefits may also make an individual ineligible for an HSA.
Preventative care services are not required to be subject to deductible.
Individuals may also carry separate coverage for accidents, disability, dental care, vision care, and long-term care not subject to the deductible.
Maximum HSA contribution limits are indexed annually.
- Individual High-Deductible Health Plans (2017) – Maximum annual contribution of $3,350
Individual High-Deductible Health Plans (2018) – Maximum annual contribution of $3,450
Family Plans (2017) – Maximum annual contribution of $6,650
Family Plans (2018) – Maximum annual contribution of $6,900
If your HDHP begins after January 1 and you make the full-year contribution, you may be subject to an IRS Testing Period in addition to taxes and/or penalties if you do not remain HSA-eligible through April 15 of the following year. If the level of your coverage decreases in the middle of the year, you may also need to prorate your contribution to avoid penalties.
Prior year contributions may be made through April 15 of the following year.
Individuals age 55 and over who want to add additional funds in their HSA as they approach retirement may make an additional “catch-up” contribution of up to $1,000 in 2017 and in 2018. A married couple can make two catch-up contributions as long as both spouses are at least 55, and the spouse’s catch-up funds must be placed in a separate HSA.
Contribution can be made by:
- Individuals (tax-deductible for account holder)
- Family members (tax-deductible for account holder)
- Employers (pre-tax)
One-time contributions can be made from an individual’s IRA or Roth IRA without being subject to tax. The one-time contribution limit is the same as the maximum annual HSA contribution and both accounts must be in the same individual’s name.
You may be subject to an IRS testing period if you do not remain an eligible individual from the month the contribution is made through the last day of the 12th month following that month.
HSA distributions are tax-free if they are used to pay for qualified medical expenses, such as:
- Amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease
- Qualified long-term care services and long-term care insurance
- Continuation of coverage required by Federal law (i.e., COBRA)
- Health insurance for the unemployed
- Medicare expenses (but not Medigap)
- Retiree health expenses for individuals age 65 and over
Distributions made for non-eligible expenses are subject to income tax and a 20% penalty.
The penalty is waived for distributions made by individuals age 65 and over, or in the case of death or disability.
Treatment at Death
If the HSA owner dies, ownership can be transferred to the owner’s spouse tax-free or to another beneficiary as estate income.
IMPORTANT: Qualified health care expenses may not necessarily apply to your specific insurance plan deductible. Review your insurance plan for details.
Wondering what kind of eligible medical expenses your HSA funds will cover? “Eligible medical expenses” are defined as those expenses paid for care as described in Sections 213 (d) or IRS Publication 502.
For a complete list and more detailed information, please refer to IRS Publication 502 titled “Medical and Dental Expenses.” Catalog Number 15002Q at http://www.irs.gov/pub/irs-pdf/p502.pdf.
Publications can be ordered from the IRS by calling 1-800-TAX-FORM (829-3676), or viewed, printed or downloaded from www.irs.gov.
Tax advice should be directed to your tax advisor or CPA.
Q: What is a Health Savings Account?
A: An HSA is an account that allows you to pay for health expenses. With an HSA, you have the ability to both pay immediate medical expenses and you can save funds to cover future expenses.
Q: Why would I need a Health Savings Account?
A: These accounts allow you to have better control over your health care funds, which may become more important to you as the costs of health care and insurance continue to rise.
Q: Am I eligible to open an HSA?
A: To be eligible for a Health Savings Account, your health insurance coverage must be a High Deductible Health Plan (HDHP), you can’t be covered by another non-HDHP insurance plan (not including specific injury insurance and accident, disability, dental care, vision care, or long-term care), you must not be enrolled in Medicare, and you can’t be a dependent on another individual’s tax return.
Q: What is a High Deductible Health Plan (HDHP)?
A: The High Deductible Health Plan label is not just used for plans with high deductibles. An HDHP simply meets IRS guidelines for minimum deductibles and maximum out of pocket expenses. An HDHP which qualifies for a Health Savings Account may have no deductible for preventative care, but higher co-pays and out-of-pocket requirements for other services.
Q: How much can I contribute to a Health Savings Account?
A: Annually, the IRS sets limits on maximum annual contributions. Individuals age 55 and over may also contribute a catch-up contribution, which is also indexed annually.
Q: Will I lose my HSA funds at the end of the year?
A: No, any funds left in your Health Savings Account at the end of the year will roll over to the next year.
Q: Can I earn dividends on my Health Savings Account?
A: Yes, the funds in your HSA will earn dividends tax-free.
Q: Who has control over the money in my Health Savings Account?
A: The account holder of an HSA has complete control over the funds. However, it is important to remember that these accounts may be audited by the IRS to ensure they are being used for eligible medical expenses.
Q: Can I use online access to move funds into my HSA from my other 3Rivers accounts?
A: Yes, you are able to make online transfers to your HSA from your other 3Rivers accounts. However, these transactions will only count toward the current year contributions. If you want to make a contribution toward the prior year, there is a form that must be filled out so you must visit a branch or call the Member Relations Center at 1-800-825-3641 (select Option 1).
Q: What are the IRS approved medical expenses?
A: In general, you can use your tax-advantaged HSA dollars on medical, dental (including braces for your children) and vision expenses, chiropractic visits, and even acupuncture, but not on your insurance premium, unless you are unemployed and are collecting Federal unemployment benefits.
Q: How do I submit a change of address or beneficiary?
A: Contact 3Rivers at 1-800-825-3641, Option 1, to receive the HSA information change form. Completed forms can be faxed or mailed to 3Rivers.
3Rivers Federal Credit Union
P.O. Box 2573
Fort Wayne, IN 46801
Q: Can I use my Health Savings Account for anything other than medical expenses?
A: You have total control over the funds you invest in your HSA. Keep in mind, however, that if you use these non-taxed funds for non-medical uses, you may be required to pay income tax along with a 20% penalty for a non-medical withdrawal prior to age 65.
Employers, you need a solution to help your employees with their health coverage. We can help.
You’re focused on doing what’s right for your business and making sure your employees are able to do their jobs. Helping them stay healthy is a big part of keeping your team’s performance at a high level. That’s why you need solutions to keep your employees covered but also to keep your bottom line from suffering. We can help you learn more about Health Savings Accounts and set up the right plan for your business.
- No set-up, enrollment, or monthly account maintenance fees
- Fast and easy online account opening
- Convenient locations and online solutions to help your team manage their accounts easily
- Lower insurance premiums
- Savings from premiums help fund HSA
- Both the employer and employee can make contributions
- Employers’ FICA savings on contributions
To learn more about making us your HSA partner, talk to your insurance agent.
*This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies.
Rates & Terms
- Health Savings Account (HSA)
Up to $24,999.99
No minimum opening balance required.
1Dividends are calculated on the daily balance, compounded daily and credited to the account at the end of the month. Dividends begin to accrue upon deposit. Dividend rates are tiered. If the balance falls below the minimum for the tier, the dividend rate drops to the rate for the next tier.
2Variable rate account, rate is subject to change anytime after account opening. Fees could reduce earnings. Please see our Fee Disclosure Statement for further information about fees potentially related to these accounts.
3APY=Annual Percentage Yield. Deposit accounts are insured by account ownership up to $250,000 by the NATIONAL CREDIT UNION ADMINISTRATION. Additional insurance coverage of $250,000 is provided by EXCESS SHARE INSURANCE for total protection up to $500,000.