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What is a Health Savings Account (HSA)?

A Health Savings Account is an account that you can put money into to save for future medical expenses for you and your family. An HSA works like an IRA

How will an HSA save me money?

An HSA may save you money through lower premiums and tax savings. The money deposits in your account can be used to pay your insurance deductible and other out-of-pocket medical expenses.

What are the additional benefits of an HSA?

  • Tax Savings. Annual contributors are tax deductible from federal and most state income tax, including Oregon. Plus, qualified withdrawals are free from federal income tax.
  • Ownership. Funds remain in the account from year to year, just like an IRA.
  • Earned Interest. Dividends earned are tax-free.
  • Portability. You, not your employer, own the account so you can always keep your HSA.

HSA Account Diagram
Who is eligible to open an HSA?

To be eligible to contribute, the individual:

  1. Must be covered by a qualified High Deductible Health Plan (HDHP).
  2. Cannot be covered by Medicare.
  3. Cannot be covered by other health insurance that is not an HDHP (excluding accident, dental or vision plans).
  4. Cannot be claimed as a dependent on another person's tax return.

What is qualifies as a High Deductible Health Plan?

For calendar year 2015, a "high deductible health plan" is defined as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,450 for self-only coverage or $12,900 for family coverage. Other restrictions may apply.

What can I use my HSA funds for?

Funds used to pay for the following are tax-free and penalty-free:

  1. Qualified medical expenses such as doctor visits, prescription drugs, and over-the-counter medicines. (See IRA Publication 502: Medical and Dental Expenses)
  2. COBRA Insurance
  3. Qualified long-term care insurance and expenses
  4. Health insurance premiums for individuals receiving unemployment compensation.
  5. Medicare and retiree health insurance premiums, but not Medicare Suppliment premium. Funds may be used for eligible expenses for your spouse or dependents, even if they are not covered by the HDHP

How do I access the funds in my HSA?

Funds may be accessed with HSA checks or bill pay or by withdrawing funds at your local branch. Contact your local representative for complete details.

How much can I contribute to an HSA?

For Individual the limit is $3,350.00. For Family is $6,650.00. With the catch-up contribution of $1,000.00 for individuals over 55.

Can any unused funds be rolled over each year?

Yes. Your funds will accumulate without a maximum cap.

What happens at age 65?

When you turn 65 you should become eligible for Medicare. If you enroll in Medicare, you may no longer contribute to your HSA. You may use your existing HSA funds to pay qualified medical expenses. You may withdraw any amount from your account for any reason, penalty free (though you must pay incomes taxes on withdrawals at that time).

What happens to my HSA when I die?

If you are married, your HSA will pass to your surviving spouse, tax-free. If you are unmarried and did not name a beneficiary, the money is disbursed to your estate and is subject to any applicable taxes. Funds paid to a non-spouse beneficiary are also subject to applicable taxes.

Where can I open my HSA?

You can open an HSA at Pacific Crest Federal Credit Union. We offer savings, checking and health money market accounts. To open your account please contact your local branch.