It’s always a good idea to be prepared, whether for an emergency or planned expense. A Health Savings Account (HSA) can help you plan for medical expenses, be prepared for emergencies, or even help you save for long-term goals such as retirement. If you qualify, an HSA can benefit you, no matter what stage of life you’re in.

Who Qualifies?

• Need a High Deductible Health Plan (HDHP).
• Cannot have other first-dollar medical coverage (with few exceptions).
• Cannot be enrolled in Medicare.
• Cannot be claimed as a dependent on another person’s tax return.

“While it may seem like all health plans are high deductible, there is a designated amount that qualifies a health plan as high deductible,” Merchants Bank HSA Expert, Nancy Denstad, said.

Plan qualifications may change by year; you can check the current year’s guidelines at irs.gov.*

How Can YOU Benefit?

“An HSA can really be good for just about anything,” Denstad said.

An HSA is a way to designate funds for qualifying medical expenses for you, your spouse or dependent children (even if they are not covered under an HDHP). It can also be a way to set aside money to support your healthcare needs after retirement.

Contributions to an HSA can be claimed as a tax-deduction, and those contributions gain interest. Putting money into an HSA and letting it grow can be part of a retirement savings plan for future health expenses. Another benefit is that after the age of 65 the funds can be used for anything.

Merchants Bank has HSA’s in the form of a checking account or a certificate of deposit (CD). An HSA checking would be beneficial for those who know they’ll need convenient access to funds for medical costs, and a CD may be a great option for those looking to let contributions grow interest over a longer period of time.

How They Work

HSA’s are opened with HSA Trustees, such as Merchants Bank. Your HSA contributions are reported to the IRS each year by your HSA Trustee.

You, your employer, or both can make contributions (up to a certain amount) throughout the year. You can also make contributions for the previous tax year prior to April 15 of the following year.

Opening an HSA at Merchants Bank is as easy as opening a checking account; all you need to bring is a current ID.

Be Aware

There are some important things to remember about HSA’s:

• There is a maximum amount you can contribute to an HSA for the year. Check irs.gov* for the current contribution limits.
• You must not overdraw your HSA. If an overdraft occurs, it stops being an HSA account and there may be tax consequences for the account owner.
• Contributions to an HSA must stop after the holder is enrolled in Medicare.
• All contributions made to an HSA over the teller line are counted as current year contributions. To make a contribution to the previous year, see a Customer Service Representative.
• You can visit irs.gov* anytime for the most recent qualifying HDHP amounts, qualifying medical expenses, contribution limits and other details.
• Consult your tax advisor to see if an HSA could be right for you.

You could benefit from an HSA. To learn more, visit our website for more HSA information, including HSA calculators. Get started saving right away: contact one of our Customer Service Representatives today.

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