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Health Savings Accounts

Financial health today for tomorrow’s health care needs.

When it comes to your health and the health of your family, we understand there’s significant peace-of-mind that comes with the confidence of being in good financial shape. To help get you there, our Five Star Bank Health Savings Account (HSA) offers you the savings and convenience that will make meeting the health care needs of you and your family easier.

A Health Savings Account (HSA) is a tax-advantaged account available only to individuals who have qualifying High-Deductible Health Plans (HDHP). You and/or your employer can deposit funds that you can use to cover qualified medical expenses incurred each year before you meet your health plan's deductible.

Triple Tax Savings

An HSA provides tax savings in three ways:

  1. Contributions can be made with pre-tax dollars, reducing your taxable income
  2. After-tax contributions that you make to your HSA are tax deductible
  3. HSA funds earn interest tax free, and when used for eligible healthcare expenses are also free from tax

Note: HSA withdrawals not used for qualified medical expenses are taxable and subject to penalties. Consult a tax advisor.

 

Rollover Benefits

Unlike Flexible Savings Accounts (FSA), any unused funds in your HSA can be rolled over year-to-year. There is no "use it or lose it" rule — even if you change jobs or healthcare plans.

Because HSAs are portable, if you have a fee-bearing HSA at another institution, you can move the account to Five Star Bank and enjoy the benefits of Five Star Bank’s HSA.

Healthy future in progress.
Saving for future health expenses: the healthiest thing you can do for your tomorrow. Let us help guide you in making the best-fit decision for your and your family by answering some of your most frequently asked questions. The details below are meant for informational purposes only. Please seek the advice of a tax advisor for further information around Health Savings Accounts.

1. Am I Eligible for a Health Savings Account?
To be eligible for an HSA, you must meet the following requirements: IRS limits for deductibles and maximum out-of-pocket amounts. These limits can change from year to year. For current information, visit www.irs.gov and use the search bar to find Publication 969, “Health Savings Accounts and Other Tax-Favored Health Plans.”
  • Have no other health coverage,
  • Not be enrolled in Medicare.
  • Not be claimed as a dependent on another person’s tax return (other than your spouse’s).
2. Are there any fees to open or maintain an HSA at Five Star Bank?
No. Unlike many other banks and institutions, Five Star Bank charges no account application fee, no monthly maintenance fee, and no minimum balance fee.
3. What Annual Percentage Yield will my savings earn in my Five Star Bank HSA?
This account is a tiered, interest-bearing account. For current rates, please contact your local Five Star Bank branch office or go to https://www.five-starbank.com/resources/personal-savings-rates
4. Who may contribute to an HSA?
You, as an HDHP policy owner, or your employer, or both may contribute to your HSA account. Contributions can be made via direct deposit or deposits at a branch office.
5. Are there contribution limits?
There are annual contribution limits that are based on the type of HDHP coverage you have and your age. For the current limits, refer to www.irs.gov
6. How do I access the funds in my HSA?
There are three easy ways to access the funds in your Five Star Bank HSA:
  • Health Savings Account Debit MasterCard®
  • Checks
  • Five Star Bank Digital Banking or Bill Payor Access
7. Do unused funds in an HSA roll over year after year?
Yes. The unused balance automatically rolls over year after year. You will not lose the money if you do not use it within the year.
8. How may the funds be used?
You can only use the funds for qualified medical expenses. The IRS defines the medical expenses that qualify for coverage under HSAs as “the cost of diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body.”

A few examples of common qualified medical expenses include dental treatment, contact lenses, co-pays, doctor’s fees, hearing aids, hospital services, laboratory fees, nursing services, and prescriptions. For the complete list of qualified expenses, visit the IRS website, www.irs.gov, and use the search bar to locate Publication 502, "Medical and Dental Expenses" (including the Health Coverage Tax Credit).

NOTE: Insurance premiums are generally not considered qualified medical expenses unless they are used to pay for:
  • Continuing COBRA or ERISA coverage
  • Certain long-term care insurance
  • Health coverage during unemployment
  • Coverage over age 65, including Medicare or employer retirement health benefits
If you have questions about the eligibility of a medical expense, please consult your tax advisor or the IRS.
9. What records will I need to keep for tax purposes?
As the HSA account holder, you are responsible to make sure that your HSA funds are used only to pay for qualified medical expenses. It is your responsibility as the account holder to keep records to show that:
  • The distributions were used exclusively to pay for or reimburse qualified medical expenses.
  • The qualified medical expenses had not been previously paid or reimbursed from another source, and
  • The medical expenses had not been taken as an itemized deduction in any year
NOTE: For tax purposes, retain all receipts related to expenses you pay from your HSA. For more information, consult a tax advisor.
10. What IRS forms will I receive from Five Star Bank?
We will mail the following IRS forms to you annually:
  • Form 5498-SA reflecting all contributions made to your HSA
  • Form 1099-SA reflecting all distributions made from your HSA
You have from January 1st to April 15th to make contributions for the prior year.
11. Is overdraft protection available for my HSA?
No. Overdraft protection is not allowed on HSAs. Point of Sale and ATM transactions that would result in an overdraft will be declined and no overdraft item fees will be assessed. Pay Advantage is also not available on HSAs.
12. Where can I find additional information?
Additional information can be found in the Five Star Bank Health Savings Account Custodial Agreement or online within:
  • IRS Publication 969 - "Health Savings Accounts and Other Tax-Favored Health Plans"
  • IRS Publication 502 - "Medical and Dental Expenses" (including the Health Coverage Tax Credit)
NOTE: IRS Publications are available on the website www.irs.gov. Use the search bar on the site to locate the above publications.
13. Where is my Five Star Bank HSA Debit MasterCard® accepted?
Your Five Star Bank HSA Debit MasterCard® is accepted at ATMs and with medical providers that accept MasterCard®.
14. What if I use my Five Star Bank Debit MasterCard® for a non-IRS qualified medical expense?
Any HSA funds used for a non-IRS qualified medical expense must be reported in your annual income tax filing and are subject to income tax and IRS penalties. For more information, consult a tax advisor.
15. When using my Five Star Bank HSA Debit MasterCard®, do I select "debit" or "credit?"
We recommend you run your card as credit wherever possible, and sign for your purchase. Remember to ask for a receipt. 
16. What if I do not have enough funds in my HSA account to purchase what I need?
You can pay part of the expense from your HSA and the remaining portion through an alternative payment method. You will not be allowed to overdraw your account.
17. Are there any limits on HSA Debit MasterCard® transactions?
Yes, to know your limits please refer to your Five Star Bank Electronic Fund Transfer disclosure.
18. Who do I notify if my Five Star Bank HSA Debit MasterCard® has been lost or stolen?
If your HSA Debit MasterCard® is lost or stolen, please contact Five Star Bank at (877) 882-5782.
19. What's the deadline for contributing to my HSA each year?
According to IRS guidelines, each year you have until the tax filing deadline to contribute to your HSA (typically April 15th of the following year).
20. Does the HDHP policy have to be in my name to open an HSA?
No. The policy does not have to be in your name, as long as you have coverage under the HDHP (assuming you meet the other eligibility requirements). If the HDHP is in your spouse's name, you can still be eligible for an HSA.
21. If I am on Medicare, can I have an HSA?
You are not eligible for an HSA once you have enrolled in Medicare. If you had an HSA before you enrolled in Medicare, you can keep it. However, you cannot continue to contribute to it after you have enrolled in Medicare.
22. My employer offers a Flexible Spending Account (FSA). Can I have both an FSA and HSA?
You can have both types of accounts, but only under certain circumstances. For more information, please reference www.irs.gov.
23. My employer offers a Health Reimbursement Account (HRA). Can I have both an HRA and HSA?
You can have both types of accounts, but only under certain circumstances. For more information, please reference www.irs.gov.
24. My spouse has a Flexible Spending Account (FSA) or a Health Reimbursement Account (HRA). Can I have an HSA?
You cannot have an HSA if your spouse's FSA or HRA can pay for any of your medical expenses before your HDHP deductible is met.
25. Do my HSA contributions have to be made in equal amounts each month?
No. You can contribute any amount or frequency you wish, up to the annual contribution limits.
26. If both spouses are 55 and older, can both spouses make "catch up" contributions?

If only one spouse has an HSA in their name, only that spouse can make a "catch up" contribution. If both spouses are eligible individuals and both spouses have established an HSA in their name, then both spouses can make a "catch up" contribution.

27. If I have an HSA but am no longer in an HDHP, can I still use the money in my HSA account for medical expenses tax free?
Once funds are deposited into an HSA, the account can be used to pay for qualified medical expenses tax free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds.
28. What happens to the money in my HSA account if I lose my HDHP coverage?
Once funds are deposited into an HSA, the account can be used to pay for qualified medical expenses tax free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain available to you. There is no time limit on using the funds. However, you are no longer eligible to contribute to an HSA for any month in which you are not covered by an HDHP. For more information, please go to www.irs.gov.
29. Who will be the "bookkeeper" for my HSA?
It is your responsibility to keep track of your deposits and expenditures. Remember to keep all your receipts.
30. Can my HSA be used to pay insurance premiums?
No. This would be a non-medical withdrawal and would be subject to taxes and penalty.
31. What happens to my HSA when I die?
Your HSA will be treated as your surviving spouse's HSA, but only if your spouse is the named beneficiary. If there is no surviving spouse or your spouse is not the beneficiary, then the savings account will cease to be an HSA and will be included in the federal gross income of your estate or named beneficiary.
Stop in to your local branch today to open your Health Savings Account with Five Star Bank.



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