What are the benefits of a Health Savings Account (HSA)?
A few benefits of a Health Savings Account are:
- HSA earnings are tax-deferred, or tax-free when used for qualified medical expenses
- HSAs may be used to pay qualified medical expenses with pre-tax dollars
- HSA balances are carried over year-to-year.
- Starting at age 65 unused HSA funds may be used penalty-free as taxable retirement income
- Upon death, HSA assets become property of the beneficiary (A spouse may treat the assets as his/her own HSA. For a non-spouse beneficiary, inherited HSA assets are treated as ordinary taxable income.)
Who is eligible to participate to a Health Savings Account (HSA)?
- Members must have their own primary membership to open an HSA at Delta Community Credit Union.
- No joint owners are allowed on HSAs, but HSAs may have an Authorized Signer. In addition, Single and Family HSAs may have beneficiaries.
- Eligibility is determined on a monthly basis. On the first day of the month, the HSA holder:
- Must be covered by a high deductible health plan (HDHP)
- May not be covered by any health plan that is not a HDHP
- May not be enrolled in the federal government's Medicare program
- May not be claimed as a dependent on another person's tax return
What is the contribution deadline for an HSA?
The deadline to contribute to an HSA for the previous tax year is the tax return deadline (usually April 15th, but the date may vary).
HSA Contribution Limits
For more information, visit the IRS website.
How can I contribute to my HSA?
You can contribute to an HSA through Online Banking or our Mobile App. Contributions you make through Online Banking may be made for the current year or the previous year. Previous year contributions must be made prior to the tax return deadline for that year and can only be made within Online Banking from a web browser; this is not available within Delta Community’s Mobile App.
You may also submit a request that Delta Community make the contribution(s) for you by completing the HSA deposit forms. BAll forms must be completed, signed and must indicate the tax year for which the contribution is being made.
On the HSA Contribution Eligibility form in Part 3. Contribution Type Eligibility Requirements, all four (4) statements under the heading: Regular must be true and all four (4) boxes marked with a check or “X” mark certifying eligibility to contribute to an HSA.
Return the completed forms in person at a branch, by mail, by fax or upload through Online Banking. For your convenience, the address and phone number appear under Part 2 on the forms.
To upload the forms, follow the steps below:
- Log into Online Banking and select Contact Us under Additional Services.
- Select Messages to create a New Message.
- In the subject add “Attention IRA Department” and in the Description, include the names of the forms.
- Attach the files before submitting the message.
How can I access my HSA funds?
Withdrawals from an HSA account can be done using different methods including:
- Debit Cards
- In branch withdrawal with a Member Service Agent
- Online Banking
- Mobile Banking App
ACH to HSA Account - Code as Checking Account
If you request to deposit electronically (ACH) to your Health Savings Account, you will need to advise the company or financial institution to code it as a Checking Account and not as a Savings Account. This is due to HSA Accounts having check writing capabilities.
What happens to the money in my HSA if I lose my HDHP (High Deductible Health Plan) coverage?
When coverage under a HDHP is lost, funds deposited into your HSA remain in your account and automatically carry over from one year to the next. You may continue to use the HSA funds for qualified medical expenses. If you are no longer enrolled in a high deductible health plan, you are not eligible to contribute additional funds to an HSA. If you regain HDHP coverage at a later date, you may begin making contributions to your HSA again. Call Delta Community’s IRA/HSA Department at 404-677-4600 to advise that you are no longer covered under a HDHP.
If you regain HDHP coverage at a later date, you may be eligible to make prorated contributions to your HSA again.
If you are not covered by an HDHP for the entire year, the annual contribution limit may be prorated. It is recommended to consult a tax professional to determine the maximum contribution allowed for the tax year.
What are qualified medical expenses for Health Savings Accounts (HSAs)?
Qualified medical expenses for HSAs include, but are not limited to, the following:
- Medical expenses including doctor visits, prescriptions, transportation to get medical and dental care
- Long term care services
- Health coverage when unemployed
- Certain continuation of benefit health care coverage
- Certain health insurance after age 65
Refer to IRS Publication 502: Medical and Dental Expenses for a complete list of qualified medical expenses. It is recommended to consult a tax professional to determine if a medical expense is considered qualified.