If you're concerned about the uncertainty of rising health care costs, First Bank and Trust's Health Savings Account (HSA) can help you address future expenses and remove some of the stress of paying for medical care. Our HSA builds your savings at a competitive rate while providing anytime access to your money. Contributions you and your employer make to your HSA are excluded from income tax, and any interest you earn is tax-free when used for qualified medical expenses. You must be enrolled in a High-Deductible Health Plan in order to open this account.
We make it easy for our customers in Louisiana, Mississippi and Florida to build up savings in an HSA. You can make deposits through payroll deductions, by speaking with a banker or by transferring money from your other FBT accounts. We'll help you prepare for the future. If you need more information, read through our frequently asked questions.
HSAs are available to individuals covered by a High-Deductible Health Plan (HDHP) regardless of whether they are self-employed or employed by an employer, and regardless of whether their employer maintains the HDHP.
You are an eligible individual for any month if you:
An employer may offer HSAs through a cafeteria plan. Employer contributions to an HSA reduce what an individual can contribute, but they do not eliminate an individual’s ability to contribute.
HSAs can provide significant tax benefits. Not only can they provide tax benefits related to paying qualified medical expenses, they may also serve as additional income for retirement.
Non-qualified uses of HSA assets are subject to taxes and a 20% penalty unless the HSA owner is age 65 or older, dies, or is disabled.
An HDHP is an insurance policy that meets certain dollar limits as shown in the table below. If the plan does not meet both the deducible and out-of-pocket expense restrictions, it is not considered an HDHP.
For HSA assets to retain their tax-free status, they must be withdrawn and used for certain qualified medical expenses. Qualified medical expenses are generally expenses that qualify for the medical and dental income tax deductions as defined in IRS Publication 502. Expenses paid with HSA assets cannot also be claimed as a deduction on your income taxes. Here are some examples:
Sole proprietors and others who are self-employed can have an HSA and are, in fact, often ideal candidates for an HSA. HSAs are often advantageous for self-employed individuals because:
The total amount you or your employer may contribute to an HSA is dependent upon whether you have individual or family coverage under an HDHP as shown in the table below. The contribution limit is dependent on the annual statutory limit set by the Treasury.
In addition to the standard HSA contribution limit, if you have attained age 55 before the close of a taxable year, you may also contribute an additional amount known as a “catch-up” contribution, as shown in the table below.
HSAs require the following government reporting:
*Maximum Catch-up applies to those 55 or older.
*Check with your tax advisor about eligible deductions
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