An innovative health care solution. Health Savings Accounts (HSAs) were developed to help address the issue of rising health care costs. With money-saving features and special tax benefits+, these accounts are becoming increasingly popular.
A Health Savings Account has two components. First, you must participate in a high deductible health plan (HDHP). The IRS specifies a minimum annual deductible and a maximum limit for out-of-pocket expenses. Your HDHP must meet these dollar limits. Once your HDHP is in place, you may open a special savings account with specific contribution limits and withdrawal guidelines.
The total amount you or your employer may contribute to an HSA depends on whether you have self-only or family coverage under your HDHP.
If you are 55 by the end of the year, you may qualify for an additional "catch-up" contribution of $1,000. Medicare coverage or partial year HSA participation may reduce your allowable contributions.
You can make tax-free, penalty-free withdrawals if the funds are used for certain qualified medical expenses. Generally, this includes expenses that qualify for the medical and dental income tax deductions as listed in IRS Publication 502.
Non-qualified distributions of HSAs are subject to taxation and a 20 percent penalty unless the HSA owner is age 65 or older, dies, or is disabled.
To learn more, please contact our Call Center at 860.446.8085 or 800.962.3237, or stop by any Charter Oak branch.
Contribution limits, qualification criteria and other terms and conditions relating to these accounts can change at any time. Before you open your account, consult your tax advisor for current IRS laws and regulations associated with these types of accounts and whether they are a suitable investment for your financial situation.
*Annual Percentage Yield (APY). Dividends compounded and credited monthly. Rates subject to change without notice.
+Before you open your account, consult your tax advisor for current IRS laws and regulations associated with these types of accounts and whether they are a suitable investment for your financial situation.