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HEALTH SAVINGS ACCOUNTS
What is a Health Savings Account?
A Health Savings Account (HSA) is a tax-exempt custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and your eligible dependents.
Am I Eligible for an HSA?
You are eligible for a regular HSA contribution if you:
• Are covered under a high-deductible health
plan (HDHP);
• Are not also covered by any other health plan
that is not an HDHP (with certain exceptions for
plans providing preventive care and limited types
of permitted insurance and permitted coverages);
• Are not enrolled in Medicare; and
• Cannot be claimed as a dependent on another
individual’s tax return.
What is an HDHP?
An HDHP is a plan with an annual deductible no less than the amounts shown in the chart that follows.
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HDHP Annual Deductible
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Tax Year
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Self-Only Coverage
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Family Coverage
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2007
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$1,100
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$2,200
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2008 and later
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Subject to COLAs*
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Subject to COLAs*
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*Cost-of-living adjustments
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Maximum Out-of-Pocket Expenses
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Tax Year
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Self-Only Coverage
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Family Coverage
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2007
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$5,500
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$11,000
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2008 and later
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Subject to COLAs*
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Subject to COLAs*
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*Cost-of-living adjustments
What are an HSA Owner’s Responsibilities?
If you are eligible, you can establish an HSA at First Federal in much the same way you would establish an IRA. Each year you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distributions.
Who Can Contribute to My HSA?
If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person (including non-individuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.
How Much Can I Contribute to My HSA?
Beginning in 2007, the maximum annual contribution amount is the standard limit.
Additionally, a “catch-up” contribution is available for eligible individuals who are age 55 or older by the end of their taxable year and have not enrolled in Medicare. The chart that follows shows the contribution limits.
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Contribution Limits
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Tax Year
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Standard Limit
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Additional Catch-Up
Contribution Amount
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Self-Only
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Family
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2007
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$2,850
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$5,650
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$800.00
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2008
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Subject to COLAs*
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Subject to COLAs*
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$900.00
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2009 and later
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Subject to COLAs*
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Subject to COLAs*
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$1,000.00
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*Cost-of-living adjustments
How Do I Claim the Federal Tax Deduction for My HSA Contribution?
Contributions to an HSA are fully deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax-free.
You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes.
Rollover and transfers from HSAs, IRAs, Archer medical savings accounts, health reimbursement arrangements, and flexible health spending accounts are not deductible.
How are HSA Distributions Taxed?
The qualified medical expenses must be incurred after the HSA has been established.
HSA distributions used exclusively to pay for or reimburse qualified medical expenses incurred by you, your spouse, or your dependents are not included in gross income.
Any other distributions are included in income unless rolled over. Distributions not use to pay for or reimburse qualified medical expenses or not rolled over are subject to an additional 10 percent tax unless made after your death, your disability, or you r attainment of age 65.
First Federal is not required to determine whether HSA distributions are used for qualified medical expenses.
How is HSA Activity Reported?
Each year, First Federal will report to the IRS on IRS Form 5498-SA the contributions made to your HSA and on IRS Form 1099-SA any HSA distributions you make. In addition, you file IRS form 8889, Health Savings Accounts (HSAs), as part of your federal income tax return to show your HSA contribution and distribution activity.
First Federal’s Health Savings Account
First Federal’s HSA Accounts are set up as interest bearing checking accounts similar to a NOW account. The interest rate will be tiered based upon the account balance. Customers receive a free HSA checkbook with 50 special HSA checks and 20 special HSA deposit slips. Customers receive a monthly statement with images of their checks and a $2.00 monthly maintenance fee will be charged for each statement cycle.
Available now, to First Federal Savings & Loan customers, is an E-Statement option. With E-Statements, you will receive your account statements in a more timely and convenient manner. At no charge to you, each month when your statement cycle is complete, you can be sent a message into your e-mail notifying you that it is ready.
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Notice: This web site contains links to outside web sites. These sites are not owned, operated, controlled or reviewed by First Federal Savings & Loan. These links are provided solely as a courtesy and convenience to you, the visitor. Upon clicking the provided link, you will be leaving First Federal's web site.
PHISHING STATEMENT: Phishing, also called "carding," is a high-tech scam that uses spam to deceive consumers into disclosing their credit card numbers, bank account information, Social Security numbers, passwords, and other sensitive information.
First Federal Savings and Loan will never request any confidential information from a customer such as account number, social security number, PINs or passwords by email or phone call. Never give out confidential information unless you have originated a voice or in-person conversation and we are requesting this for identification reasons.
Only enter your on-line banking accounts through the First Federal Savings & Loan website.
www.firstfederalmattoon.com
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EQUAL HOUSING LENDER
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~ Conveniently Located To Serve You ~
1111 Charleston Avenue
Mattoon, IL 61938
217-235-5411
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