Health Savings Accounts

A Health Savings Account (HSA) is a tax-favored account that you can put money into to save for future medical expenses. To qualify for an HSA, an individual must have a high-deductible health plan (HDHP), defined as having a deductible of at least $1,200 for an individual, or $2,400 for a family in 2010. The out-of-pocket maximum for 2010 is $5,950 for individuals and $11,900 for family coverage. The individual may not be enrolled in Medicare, and normally cannot be covered by any other health plans in addition to their HDHP.

How do I get an HSA started at LCU?

• Check with your health plan administrator for eligibility.
• Find answers and information about qualified medical expenses.
• Stop in any LCU office to open your account and start earning dividends! View the current rates.
• Access your funds like a checking account with checks or a Debit card when qualified expenses arise.
• Health Savings Account disclosure

Can the credit union help me determine if I qualify for a Health Savings Account?
No. Your health insurance plan administrator will be able to assist you with this determination.

Does the credit union monitor or approve my HSA transactions?
No. The HSA account holder is solely responsible for funds going out of the account and must keep sufficient records to show that the distributions were used exclusively to pay or reimburse qualified medical expenses. The records must show that the qualified expenses were not previously paid or reimbursed from another source and that they have not been taken as an itemized deduction in any prior year.

Do you notify the IRS of my HSA contributions and distributions?
The credit union files required annual information returns with the Internal Revenue Service for all HSA accounts.

What types of things are qualified medical expenses?
See IRS Publication 502 for a complete listing.

Must I use all the money each year like my flexible spending plan?
No. The funds in your HSA can continue be used for qualified health expenses in future years.

Who is allowed to make a contribution to a member's HSA?
Anyone can make a contribution to an HSA on behalf of an eligible individual. All contributions, regardless who makes them, will be applied toward the total amount that the member is eligible to contribute.

What will happen if a check overdraws my HSA?
You will be assessed a $25 non-sufficient funds (NSF) fee, just as you would with a standard checking account. We will, however, be unable to honor the NSF check, or provide any type of overdraft protection, because the credit union would have no way of knowing whether we might inadvertently be over-contributing to your HSA. Health Savings Account overdraft items will, in all cases, be returned. The fee will not increase your annual contribution limit.

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