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Personal Health Savings

HSA (Health Savings Account)

A Health Savings Account (HSA) is a tax advantaged savings account that can be used to pay for eligible medical expenses.  You have to be enrolled in a high-deductible health plan (HDHP) to qualify for an HSA.  You can contribute to your HSA any time of the year, up to the annual limit. View the current contribution limits set by the IRS here.

Flatwater Bank HSAs Offer the Following Features:

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Advantages of a Health Savings Account:

A Health Savings Account (HSA) can help people with high-deductible health insurance plans cover their out-of-pocket costs and comes with many other benefits:

  • Pre-Tax Contributions: Contributions are typically made with pretax dollars through payroll deductions at your employer. As a result, they are not included in your gross income and are not subject to federal income taxes. In most states, contributions are not subject to state income taxes.
  • Tax-Deductible After-Tax Contributions: If you make contributions with after-tax dollars, you can deduct them from your gross income on your tax return, reducing your tax bill for the year. For example, if you have not met your annual contribution limit by the end of the year, you may choose to deposit an additional $1,000 into your HSA in order to lower your tax liability.
  • Tax-Free Withdrawals: Withdrawals from your HSA are not subject to federal (or in most cases, state) taxes if you use them for qualified medical expenses.
  • Tax-Free Earnings: Any interest or other earnings on the money in the account is tax-free. 
  • Others Can Contribute: Contributions can come from you, your employer, a relative, or anyone else who wants to add to your HSA. The IRS does, however, set limits. In tax year 2023, for example, the limit is $3,850 for individuals and $7,750 for families, plus an additional $1,000 "catch-up" contribution for anyone age 55 or older by the end of the tax year.
  • Annual Rollover: If you have money left in your HSA at the end of the year, it rolls over to the next year. This offers more flexibility than Flexible Spending Accounts (FSAs).
  • Portability: The money in your HSA remains available for future qualified medical expenses even if you change health insurance plans, go to work for a different employer, or retire. Essentially, your HSA is a bank account in your name, where you decide how and when to use the funds.
  • Many Expenses Qualify: Eligible expenses include a wide range of medical, dental, and mental health services. They are explained in detail in IRS Publication 502, Medical and Dental Expenses.

Who Can Set Up a Health Savings Account?

You must be covered by a high-deductible health plan.  Also, you cannot open an HSA if you're covered by Medicare and Medicaid, or claimed as a dependent on someone else's return. Your health plan representative will help you determine if your plan is HSA compatible.

An HSA Functions Like a Checking Account:
Your Flatwater Bank HSA account gives you the tools to take control of your health spending.  Whether you prefer to make payments using a checkbook, pay using your Visa debit card, or using our mobile app with bill pay,  you choose what works for you!
*If your balance falls below $50.00 on any day in the statement cycle, your account will be subject to a $5.00 Maintenance Fee for that statement cycle. The statement cycle of this account is monthly.

Contributing to Your HSA is Easy:

Flatwater Bank provides multiple ways for you to contribute to your account, such as:

  • Payroll Deductions - if you have a health plan through your employer, you may be able to make pre-tax contributions to your HSA from your paycheck.  Contact your employer for more information.
  • Online Transfers - you can use our digital banking services to transfer money directly to your HSA account from other accounts.
  • Transfers or Rollovers - IRS regulations permit the transfer or rollover of funds to an HSA from an existing HSA or MSA (medical savings account).  Ask us about consolidating your HSA accounts or transferring funds.

Adding a Beneficiary to Your HSA

Consider Investing for Retirement Using Your HSA
After age 65, HSA funds can be used for qualified medical expenses and much more.  Learn about the advantages of an HSA in your retirement years.