One-Source Health Savings Account

What is a Health Savings Account (HSA)?
A Health Savings Accounts is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their routine medical expenses.  HSA’s enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.  HSA’s must be used in conjunction with a High Deductible Health Plan (HDHP).

What is a High Deductible Health Plan (HDHP)?
An HDHP is an insurance plans that has a minimum deductible of $1,000 annually for individual coverage ($2,000 minimum for family coverage).  Maximum annual out of pocket cannot exceed $5,000-individual/$10,000-family.  You need to verify with your insurance provides and/or with your employer as to whether or not your insurance plan qualifies you to contribute to an HSA.  Usually plans with co-pays are not eligible.

What are the benefits of an HSA?

• Contributions are tax deductible
• Interest earned in an HSA grows tax-free
• Money invested in an HSA carries over from year to year
• If the individual changes jobs, the HSA goes with the individual
• HSAs help make health care affordable

What are eligibility qualifications for an HSA?

• Must be covered under a qualified high-deductible health plan
• The annual deductible must be at least $1,000 for individual coverage, and at least $2,000 for family coverage
• Not covered under another type of health plan
• Not entitled to Medicare benefits (must be under 65)
• Not claimed as a dependent on another person’s tax return

What are the contribution requirements to an HSA?

Can annually contribute up to the amount of the policy’s annual deductible, subject to a cap of $2650 for individuals and $5,250 for families in 2005.  These amounts will be increased for inflation in future years.

In addition, individuals over age 55 can make additional catch-up contributions each year until they are eligible to enroll in Medicare.  The amount of the additional catch-up amount is based on the following schedule:

• 2004-$500
• 2005-$600
• 2006-$700
• 2007-$800
• 2008-$900
• 2009 and after-$1000

What are the distribution requirements from an HSA?       

• Distributions are not taxable as long as they are used to pay for qualified medical expenses such as:
• Prescription drugs
• Over-the-counter drugs
• Doctor’s office or hospital visits
• Vision care
• Dental work
• Long-term care insurance premiums
• COBRA premiums
• Health insurance premiums during any period of unemployment
• Distributions not used for qualified medical expenses are taxable and if under the age of 65 are subject to a 10% penalty.

HSA Checking
An easy tool for managing contributions and paying monthly medical expenses, HSA Checking enables you to avoid monthly account fees with:

• No minimum balance requirement
• No monthly fee
• No per debit charge

In addition, you may access your account and manage your cash flow using these convenient services:

• Unlimited check writing with monthly statement and check images
• Unlimited VISA Debit Card usage
• Unlimited Online Banking
• Unlimited 24-Hour TeleBank usage               

An opening deposit of $100 and an enrollment fee of $25 is all it takes to start taking advantage of the tax benefits of your new HSA Checking.  For more information, or to open an account, contact Kathy Butler at (864) 942-1519.

HSA Money Market
The HSA Money Market enables you to accumulate a nest egg for future medical expenses.  In addition to your tax-deferred contributions, you also earn interest income tax-free.  This advanced money market account pays an investment market rate while maintaining your FDIC deposit insurance. 
An opening deposit of $1,000 is all it takes to start earning market-level interest rates while taking advantage of these value-added features:

• Interest calculated daily and paid monthly
• Earn interest on any balance with six interest rate tiers
• Unlimited lobby transactions and Online Banking usage
• Six transfers per month*      

The interest rate tiers are structured to match the high deductible health plan options:

• Less than $1,000
• $1,000 - $4,999
• $5,000 - $24,999
• $25,000 - $49,999
• $50,000 - $99,999
• $100,000 and up

An opening deposit of $1,000 and an enrollment fee of $25 is all it takes to start taking advantage of the tax benefits of your new HSA Money Market.  For more information, or to open an account, contact Kathy Butler at (864) 942-1519.

• You may make six (6) transfers from your account each four (4) weeks or similar period by preauthorized or automatic transfer, or telephone (including data transmission) agreement, order or instruction. Three (3) of these transfers may be made by check, draft, debit card or similar order (including POS transactions), made by the depositor and payable to third parties. Transfers or withdrawals made in person, by messenger, by mail or at an ATM are unlimited.

High Deductible Health Plan
By selecting a health insurance plan with a higher deductible, employers may save up to 40% on health care expense over a traditional health care insurance plan.  Or, individuals who previously felt they could not afford health insurance now have access to cost-effective, comprehensive health insurance plans.