Today’s healthcare costs continue to climb rapidly with no end in sight. Fortunately, there’s also a brand-new way to save money on your medical expenses with a Health Savings Account, or HSA, from Sterling Savings Bank.
How do I access my money?
Sterling makes accessing your account easy:
- Sterling Savings Bank HSA Check Card - Whenever you need to make a withdrawal (distribution) for a medical expense, you simply pay with your Sterling Savings Bank HSA Check Card—good anywhere Visa® is accepted
- By check - write one of the checks Sterling provides with your account
- Online - you can also access your account online through Personal Net Banking
- Phone – contact your local Sterling Savings Bank branch or you may also call us at 1-800-772-7791
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Why should I open an HSA?
- Tax savings (consult your tax advisor)
- Reduced insurance premiums
- Balance can be carried over year to year
- Earned interest
- Long-term savings
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What type of medical expenses are allowed?
People use their HSAs to pay for regular doctor appointments, prescription drugs, eyeglasses—even over-the-counter medicines like aspirin. Ultimately, you are responsible to know whether or not your particular medical expense is allowed. For a list of qualified medical expenses, ask your health insurance provider or you may visit the website of the
Internal Revenue Service.
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How do I know if I am eligible?
The IRS has some requirements and restrictions for opening an HSA. In general, participating individuals:
- Must be enrolled in a qualified high-deductible health plan.
- Cannot be covered by another healthcare plan (with certain exceptions, including vision, dental and disability).
- Cannot be enrolled in Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
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What are the advantages of opening a Sterling HSA?
Sterling offers competitive, tiered money market rates on your balance—a huge plus given that earnings on an HSA are tax deferred (consult a tax advisor). If you open a Sterling checking account, we can also set up convenient automatic monthly transfers to your HSA. Just ask and let our friendly representatives help you. They’ll make sure you enjoy Perfect Fit banking no matter which services you need, including:
- Checking & Savings
- Free Online Banking
- Free Bill Pay1
- Direct Deposit
- Consumer Loans
Features of Sterling Savings Bank HSA account include:
- HSA Express Welcome Checks
- No monthly service charge with an active Personal Checking account
- Unlimited check writing
- Free HSA Sterling Savings Bank Check Card
- Check images available2
- Free Net Banking
- $100 minimum opening balance
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How do I open an HSA?
Simply visit your Sterling branch. To apply you must be
eligible.
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How do I contribute to my account?
You, your employer, or anyone else can contribute to your HSA. Given that high-deductible health plans typically costs less than traditional policies, the savings on premiums can easily be put into your HSA instead.
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How do I know if I qualify for an HSA?
Answer the following questions:
Are you covered by a High Deductible Health Plans (HDHP)?
No – Stop. You are not qualified to open an HSA.
Yes – Answer the following questions:
Are you also covered by any other health plan that is not an HDHP and that provides coverage for any benefit covered under the HDHP?
No – Continue to the next question.
Yes – Stop. You are not qualified to open an HSA.
Are you enrolled to receive Medicare benefits?
No – Continue to the next question.
Yes – Stop. You are not qualified to open an HSA.
Can you be claimed as a dependent on another person’s tax return?
No – You are qualified to open an HSA.
Yes –You are not qualified to open an HSA.
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I’m on Medicare or receive Veterans Administration benefits, can I have an HSA?
You are not eligible for an HSA after you have enrolled in Medicare. If you have received any health benefits from the Veterans Administration or one of their facilities, including prescription drugs, in the last three months, you are not eligible for an HSA.
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I’m active-duty military and have Tricare coverage, can I have an HSA?
At this time, Tricare does not offer an HDHP option so you are not eligible for an HSA.
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My employer offers an FSA, can I have both an FSA and an HSA?
You can have both types of accounts, but only under certain circumstances. General Flexible Spending Arrangements (FSAs) will probably make you ineligible for an HSA. If your employer offers a “limited purpose” (limited to dental, vision or preventive care) or “post-deductible” (pay for medical expenses after the plan deductible is met) FSA, then you may still be eligible for an HSA.
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My employer offers an HRA, can I have both an HRA and an HSA?
You can have both types of accounts, but only under certain circumstances. Consult a financial advisor for more information about this.
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My spouse has an FSA or HRA through their employer, can I have HSA?
You cannot have an HSA if your spouse’s FSA or HRA can pay for any of your medical expenses before your HDHP deductible is met.
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I don’t have a job, can I have an HSA?
Yes, if you have coverage under an HDHP. You do not have to have earned income from employment; the money you contribute to an HSA can be from your own personal savings, income from dividends, unemployment or other sources.
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Does my income affect whether I can have an HSA?
There are no income limits that affect HSA eligibility. However, if you do not file a federal income tax return, you may not receive all the tax benefits HSAs offer.
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Can I start an HSA for my child?
No, you cannot establish separate accounts for your dependent children, including children who can legally be claimed as a dependent on your tax return.
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Can my employer contribute to my HSA?
Contributions to HSAs can be made by you, your employer, or both. All contributions are aggregated to determine
whether you have contributed the maximum allowed. If your employer contributes some of the money, you can make up the difference.
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Can I claim both the “above-the-line” deduction for an HSA and the itemized deduction for medical expenses?
You may be able to claim the medical expense deduction even if you contribute to an HSA, however you cannot deduct medical expenses and HSA distributions. Consult a tax professional for more information about this.
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Can I make pre-tax contributions to my HSA through my employer?
Yes, if your employer offers a Section 125 (cafeteria) plan.
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I turned 55 this year. Can I make the full catch-up contribution?
If you had HDHP coverage for the full year, you can make the full catch-up contribution regardless of when your 55th birthday falls during the year. If you did not have HDHP coverage for the full year, you must pro-rate your “catch-up” contribution for the number of full months you had HDHP coverage.
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Can I use my HSA to pay for medical services provided in other countries?
Yes, you may use your HSA to pay for medical services provided in other countries.
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Can I pay my health insurance premiums with an HSA?
You can only use your HSA to pay health insurance premiums if you are collecting Federal or State unemployment benefits, or you have COBRA continuation coverage through a former employer.
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Can I purchase long-term care insurance with money from my HSA?
Yes, if you have tax-qualified long-term care insurance. However, the amount considered a qualified medical expense depends on your age. See IRS Publication 502 at www.irs.gov for the amounts deductible by age.
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I have an HSA but no longer have HDHP coverage. Can I still use the money that is already in the HSA for medical expenses tax-free?
Once funds are deposited into the HSA, the account can be used to pay for qualified medical expenses tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used.
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What happens to the money in a Health Savings Account after I turn 65?
You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, co-pays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy. Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 10% penalty on the amount withdrawn.
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This above information is intended to provide general information concerning only the federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or under your state tax laws. For specific information, you should consult your tax or legal professional.