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Knowledge Base Article

Health Savings Account (HSA)

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 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 HSA accounts, but HSA accounts may have an Authorized Signer. In addition, Single and Family HSA Accounts 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 Medicare
    • May not be claimed as a dependent on another person's tax return

What is the contribution deadline for an HSA?

If you were eligible to contribute to an HSA in 2019, you can still make 2019 contributions up to the tax filing deadline (July 15, 2020).

The due date for filing 2019 Federal income tax returns has been extended to July 15, 2020. The deadline to make contributions to your HSA for 2019 is also extended to July 15, 2020. State deadlines require individual state approval. Members should verify if their state filing deadline has also been extended. Please contact the IRA/HSA Department at 404-677-4600 if you have any questions.

HSA Contribution Limits

Tax Year HSA Type Annual Contribution Limit "Catch-Up" Contributions Owner is 55 or older
2020 Single $3,550 $1,000 ($4,550 total)
Tax Year
2020
HSA Type
Single
Annual Contribution Limit
$3,550
"Catch-Up" Contributions Owner is 55 or older
$1,000 ($4,550 total)
2020 Family $7,100 $1,000 ($8,100 total)
Tax Year
2020
HSA Type
Family
Annual Contribution Limit
$7,100
"Catch-Up" Contributions Owner is 55 or older
$1,000 ($8,100 total)
2019 Single $3,500 $1,000 ($4,500 total)
Tax Year
2019
HSA Type
Single
Annual Contribution Limit
$3,500
"Catch-Up" Contributions Owner is 55 or older
$1,000 ($4,500 total)
2019 Family $7,000 $1,000 ($8,000 total)
Tax Year
2019
HSA Type
Family
Annual Contribution Limit
$7,000
"Catch-Up" Contributions Owner is 55 or older
$1,000 ($8,000 total)

For more information, visit the IRS website.

How can I make a contribution to my HSA?

A contribution can be made to an HSA online, in person or through the mail. If contributing in person or by mail, complete the HSA deposit forms. Both forms must be completed and signed and must indicate the tax year for which the contribution is being made. For your convenience, the address and phone number are on the forms. They may be mailed or faxed to the attention of the IRA Department.

Contributions may be made through your online banking record. Contributions 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.

How can I access my HSA funds?

Withdrawals from an HSA account can be done using different methods including:

  • ATMs
  • Checks
  • Debit Cards
  • In branch withdrawal with a Member Service Agent  
  • Online Banking

ACH to/from HSA Account - Code as Checking Account

If you request to deposit/withdraw electronically (ACH) from 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. You are no longer eligible to contribute to an HSA for months that you are not an eligible individual because you are not covered by an HDHP.

If you are covered by an HDHP for less than a year, the annual maximum contribution may be prorated. If you made a contribution to your HSA for the year based on a full year's coverage by the HDHP and do not have HDHP coverage for a full year, you may need to withdraw some of the contribution to avoid the tax on excess HSA contributions. If you regain HDHP coverage at a later date, you can begin making contributions to your HSA again. 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:

  • 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 IRA 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.