Personal Savings

Health Savings Account (HSA)

Feel good about your next visit to the doctor once you a open a Health Savings Account — the easy tax-free* way to save for qualified medical expenses. An HSA works alongside a high deductible health plan to help you cover future health care costs.

Even access your health savings as necessary with a free† HSA debit card so you can pay as painlessly as possible.

Summary
  • Save for future medical expenses
  • Earn competitive, tax-free* interest to pay for qualified medical expenses
  • Easy debit card access to your medical savings
  • HSA debit card
  • Funds roll over annually
  • Account not tied to your employer
  • Low $100 minimum deposit to open

Annual contribution limits are set by the IRS.

*When used for qualified medical expenses. Consult a tax advisor.

†See account disclosure for full details.


Detailed Information

*Note: While we can provide information to you about how HSAs work and other account details, Prime Meridian Bank does not provide advice or counsel on whether a Health Savings Account is right for you. Please refer to your tax advisor or financial planner on whether this financial product is right for you.

What is a Health Savings Account (HSA)?

A HSA is an IRA-like account designed exclusively for covering medical expenses incurred by the HSA account beneficiary (the person who establishes the account) and his or her dependents.


HSA Features

  • IRA-like account used to pay for medical expenses
  • Tax deductible contributions
  • Tax Free distributions – if used for qualified medical expenses

Prime Meridian Bank's HSA Account Details

  • Non-Interest Bearing Account
  • No monthly service charge
  • No minimum balance requirement
  • $10 annual fee (waived 1st year)
  • Checks (1st box no charge to client)
  • MasterCard Debit Card provided

Who is Eligible?

Any individual who is:

  • Covered by a high deductible health plan (HDHP)
  • Generally not covered by another non-HDHP
  • Not enrolled in Medicare
  • Not eligible to be claimed as a dependent

What is a High Deductible Health Plan (HDHP)?


  • Self Only Coverage 2013: The annual deductible must be at least $1,250 AND the out of pocket expense cap cannot exceed $6,250.
  • Family Coverage 2013: The annual deductible must be at least $2,500 AND the out of pocket expense cap cannot exceed $12,500.

Tax Advantages

Individual (Owner) Contributions

  • Tax deductible by owner
  • Tax deferred earnings

Employer Contributions

  • Tax deductible by owner
  • Excluded from employee's income
  • Not subject to withholding
  • No FICA, FUTA
  • Tax deferred earnings

Contributions

Your eligibility to contribute to an HSA for each month is generally determined by whether you have HDHP coverage on the first day of the month. Your maximum contribution for the year is the greater of:

(1) the full contribution

or

(2) the pro-rated amount


The full contribution is the maximum annual contribution for the type of coverage you have on December 1st.


The pro-rated amount is the maximum annual contribution for the type of HDHP coverage you have, times the number of months that you have the coverage, divided by 12. If your contribution is greater than the pro-rated amount, and you fail to remain covered by an HDHP for the entire following year, the extra contribution above the pro-rated amount is included in income and subject to an additional 10% tax. Contribution limits may also be affected by other retirement plan contributions. ( MAX CONT X # OF MONTHS COVERED/12 )



2013 Contribution Limits


Self-Only Coverage

$3,250

If owner is 55 or older by 12/31/13 than he/she may make an additional "catch-up" contribution of $1,000 for a total annual contribution of $4,250


Family Coverage

$6,450

If owner is 55 or older by 12/31/13 than he/she may make an additional "catch-up" contribution of $1,000 for a total annual contribution of $7,450


It is the account holder's responsibility to ensure that they do not make contributions in excess of their allowable amount. We only ensure you do not contribute over the Maximum Standard Limit.


Distributions

For HSA assets to retain their tax-free status, they may only be withdrawn and used for the following expenses:

  • Qualified Medical expense* (doctors' visits, prescriptions, transportation to get to medical care, dental care)
  • Long-term care insurance
  • Heath care coverage when unemployed
  • Certain continuation-of-benefits health care coverage
  • Certain health insurance after age 65

Non-qualified uses of HSA assets are subject to taxation and a 10% penalty unless the HSA account beneficiary is 65 or older, dies, or is disabled.


*Please refer to IRS publication 969 for listing of Qualified Medical Expenses


What are Prime Meridian Bank's Responsibilities?

  • We must not accept contributions exceeding the applicable individual or family coverage – Standard Maximum
  • Report Distributions to IRS -1099-SA
  • Report Contributions to IRS - 5498