Health Savings Accounts (HSAs) were created by the Medicare bill and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.

Qualifying for an HSA
To be eligible to open a Health Savings Account, a person must:

• Be covered under an HSA-qualified "high deductible health plan"
  
  
  • For 2010, a "high deductible health plan" is a health insurance policy that meets the following requirements:
    
    Annual Deductible:
    Individual $1,200.00
    Family $2,400.00
    
    Total out of pocket expenses cannot exceed:
    Individual $5,950.00
    Family $11,900.00

• Have no other medical coverage
  
  
  • Some exceptions are Accidental Death & Dismemberment policies, long term health care policies and policies that cover a specific health concern.
    
    Does your spouse participate in a Flexible Benefit plan (section 125)?
    Flexible Benefit plans (section 125) can cause a person to be ineligible for an HSA. If you or your spouse participate in a Flexible Benefit plan, you are not eligible for an HSA because the funds in the Flexible Benefit Plan can be used to pay for your medical expenses.
    
    Does your spouse’s employer allow reimbursement of Flexible Benefit contributions made in the current year (i.e. 2008) for medical expenses incurred from January 1 to March 15 of the following year (i.e. 2009)?
    If you answered yes to this question you most likely are not eligible for an H S A until April 1 of the following year, assuming your spouse no longer is a participant in their employer’s Flexible Benefit plan.

• Not be enrolled in Medicare
  
  
  • You qualify for an HSA if you are eligible for Medicare but not enrolled.

• Not be eligible to be claimed as a dependent on someone else’s tax return.
  
  
  • You do not qualify for an HSA if you are “eligible” to be claimed as a dependent, even if you are not actually claimed on their tax return.

HSA Account Basics
Contributions to an HSA Account are limited annually and can be made by individuals and/or employers. Qualified contributions made to an HSA are deductible when filing federal tax returns even if the person does not itemize.* The total amount of allowed contribution is dependant upon single or family coverage and varies each year.

HSA Contribution Limits

• Security—saving today for future medical expenses protects you against high or unexpected medical bills.
• Sustainability—funds remain in the account if you do not use them; there are no "use it or lose it" rules.
• Continuity—HSA owners may keep their HSAs even if they change jobs, move to another state, get married or change medical coverage.
• Control—account holders are responsible for determining where the account is held, what expenses to pay from the account and how much money to invest.

Benefits of a National Exchange Bank & Trust Health Savings Account

• The account is convenient and easy to use. With an HSA Visa debit card, paperwork is made easy as receipts document the expenses directly debited from your HSA account.
• Additional easy access to your funds through Exchange OnLine Internet banking and checks.
• Small minimum deposit of $50 to open this account.
• No monthly administrative fee if:
  
  • the account is set-up with direct deposit, or
  • $2500 is maintained in a separate savings, money market, IRA or certificate of deposit, or
  • a $500 daily minimum balance is maintained.
• Free Visa debit card with no annual fee to access the account.
• Free Internet Banking with bill payment with your HSA.
• First order of HSA checks at no charge.
• Local, friendly service.
• Low $25.00 set-up fee.

Tracking your HSA Expenses
Download this convenient HSA tracking document*  to monitor your expenses and contributions associated with your HSA account.

*Accessing this document requires Microsoft® Excel or a compatible program.

Questions and Answers About HSA Accounts
For detailed information regarding Health Savings Accounts, please visit the US Treasury Web site at http://www.treasury.gov/offices/public-affairs/hsa/. For more information about National Exchange Bank & Trust Health Savings Accounts, please contact us or call toll free at 877.921.7700.