A Health Savings Account (HSA) is an account owned by you as an individual where tax-free contributions can be made and set aside to pay for current and future qualified medical expenses (for you, your spouse and your dependents).
You are the owner of the money in your HSA. You decide how to spend the money without involvement of a third party administrator.
To be eligible, you must meet specific requirements: you must participate in a High Deductible Health Plan (HDHP) to be able to establish an HSA, are not enrolled in Medicare, and are not enrolled in another health plan that is not a HDHP. There may be some exceptions to these rules, so please consult your tax advisor for full details.
Your HSA helps you pay for the expenses your plan does not cover. To establish an HSA, your HDHP must meet the following guidelines (for 2012):
| Tax Year 2012 |
Individual |
Family |
| HDHP-minimum annual deductible |
$1,200 |
$2,400 |
| HDHP-maximum out-of-pocket |
$6,050 |
$12,100 |
| Contribution-100% of deductible-capped at maximum |
$3,100 |
$6,250 |
| Catch-up contributions available to those age 55 to 65 |
$1,000 |
$1,000 |
An HSA can be opened at any convenient Citizens Banking Center located in Indiana and Illinois. You can also call our Client Services at 1-888-226-5237 if you have any questions.
Special benefits of an HSA:
- Contributions can come from multiple sources – you, your employer or a family member.
- HSA contributions are tax-free via employer payroll. If payroll deductions are not available the contributions can be used to reduce taxable income on next year’s Form 1040*.
- The account is portable, so it moves with you when you retire or change employers.
- Interest earned on the account is tax-free, as long as distributions are for qualified medical expenses.
- There are NO set-up, annual maintenance or monthly service FEES.
- There is no minimum balance requirement.
- You don't lose any funds at the end of the year. Unused funds and interest are carried over, without limit from year to year.
- Citizens offers a variable tiered interest rate.
- You receive a detailed monthly statement with check images and an annual summary statement.
- A free HSA Check (debit) Card is included.
- Withdraw funds with unlimited check writing (free starter checks) or by using your FREE HSA Check (debit) Card.
- You name your beneficiary. In the event of your death, your spouse maintains the HSA status.
- Free Online Banking is available.
- Free Online Bill Pay is available (with the HSA as a secondary bill pay account).
- Free Telephone Banking is included.
*Please consult your tax preparer for more details.