Health Savings Account (HSA)
What is an 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 account that allows for tax-deductible contributions and tax-exempt distributions (as long as funds are spent on a qualified medical expense). Contributions to your HSA are yours to keep (even if you change jobs) and do not follow the “use it or lose it” policy of some other tax-favored accounts.
However, after the age of 65, you can withdraw the funds tax-exempt and use it as income for your retirement years.
An HSA is a special savings account available to 3Rivers members who have High-Deductible Health Plans (HDHP) as 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, your employer, or an authorized user of your account can make contributions. 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.
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.
Individual High-Deductible Health Plans (2018) – Min. annual Deductible: $1,350- Max. annual deductible and other out-of pocket expenses* $6,650
Individual High-Deductible Health Plans (2019) – Min. annual Deductible: $1,350- Max. annual deductible and other out-of pocket expenses* $6,675
Family Plans (2018) – Min. annual deductible: $2,700 - Max. annual deductible and other out-of-pocket expenses* $13,300
Family Plans (2019) – Min. annual deductible: $2,700 - Max. annual deductible and other out-of-pocket expenses* $13,500
*High Deductible Health Plan is defined under IRS ruling 223 (c)(2)(A) as a health plan with an annual deductible as stated above.
Maximum HSA contribution limits are indexed annually.
|Individual High-Deductible Health Plans (Max. Annual Contribution)||$3,500||$3,450|
|Family Plans (Max. Annual Contribution)||$7,000||$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 2018 and in 2019. 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.
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. So it's very important that you put a beneficiary on your HSA during account opening.
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.
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.