Health Savings Accounts (HSAs):
Rules & Regulations

HSA Rules: a number of rules and regulations are set for health savings accounts you should be aware of. A Health Savings Account or HSA is a medical savings account that is personally owned and managed by the individual. They are used in conjunction with High Deductible Health Insurance Plans. Contributions to the HSA account are not subject to taxation at the time of deposit. Funds in a Health Savings Account can be used to pay for all qualified medical expenses (QMEs) not covered by your High-Deductible Health Insurance Plan. Deposits to your HSA account can be made on a pre-tax basis through your employer. If you don't make the deposit through your employer, the contribution is post-tax, and you can use it to decrease gross taxable income on the following year's income tax form.

The IRS limits the amount you can put into each type of account every year. Any money you deposit above these limits is not tax-deductible. Contribution limits vary depending on whether you are setting up a single or family plan.

You can invest the money in an HSA like you'd invest funds in an individual retirement account (IRA). All investments into your HSA are sheltered from taxation. Unlike in an IRA, this money can remained tax-sheltered even after you withdraw it if it's used for qualified medical expenses.

2015 Contribution Limits for HSAs

Individual
Contribution Limit
Family
Contribution Limit
Additional Contribution
(55 or older - Single or Family)
$3,350  $6,650   $1,000

HSA - Qualified Medical Expenses

Medical service fees from doctors, dentists, optometrists, chiropractors, psychiatrists, psychologists, and other certified medical professionals are some of the examples of medical expenses that I can pay tax-free from my HSA.

 Prescription drug fees.
 Fees for lab work, therapy, nursing services and surgery.
 Fees for eyeglasses, contact lenses, hearing aids, false teeth, and any other prosthetic devices and special devices.
 Fees for insurance premiums as discussed in the previous question.
 Fees for transportation expenses needed for medical, dental or health treatment, plus many other expenses not listed above.
Please contact the Bank of Cashton with regard to any questionable qualifying expense.

HSA Rules Regarding Withdrawals

Withdrawals do not need prior approval from your bank. Withdrawals are not subject to taxation if made for qualified medical expenses such as those listed above. Withdrawals for reasons other than QME's are subject to taxation. Our HSA administrator can authorize checks and/or a personal debit card for easy access to utilizing your health savings account.

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