Set aside money for everything from ER visits to eye exams.
A huge medical bill can be financially overwhelming. So, it's a relief to learn that funds in a Health Savings Account (HSA)1 can cover treatment for serious illness or injuries - including surgery and hospital stays. Fortunately, many families avoid major crises. So, it's just as important to know that a tax-advantaged HSA2 can pay for more routine matters, including dental work, eyeglasses, prescription drugs and more.
- Health Savings Accounts are for individuals and families with high-deductible health plans.3
- Individuals can contribute4 up to $4,150 per year5 and families can deposit up to $8,300.5
- People over age 55 can contribute an extra $1,000 annually.5
- Earn interest6 on balances of $50 or more.
- Tiered interest rates mean bigger balances can earn better returns.
- All annual interest earnings are tax-exempt, and all qualified withdrawals are tax-free.
- Access funds with a free debit card.
- Any money left in your account at the end of the year automatically rolls over to the next year.
- If you change jobs - or lose your job - your HSA stays with you, unlike employer-provided health insurance.
- Year-end reporting keeps you up-to-date on your account status and balances.
Contribution Limits and Deadlines
HSA contributions4 for each specific tax year may be made through the IRS tax filing deadline for that year, normally April 15. When making a contribution between January 1 and April 15 for the prior tax year, you will need to notify AbbyBank to designate a prior-year contribution.
The Internal Revenue Service (IRS) has announced the annual contribution levels for 2024, based on your qualification. See table below for more information.
| Contributions & Qualifications | 2024 | 2023 |
|---|---|---|
| Single Contribution Limit4 | $4,150 | $3,850 |
| Family Contribution Limit4 | $8,300 | $7,750 |
| Catch-up (ages 55 +) | $1,000 | $1,000 |
| HDHP Deductible Amount (self-only coverage) | $1,600 | $1,500 |
| HDHP Deductible Amount (family coverage) | $3,200 | $3,000 |
| Annual Out-of-Pocket Expenses Cannot Exceed(self-only coverage) | $8,050 | $7,500 |
| Annual Out-of-Pocket Expenses Cannot Exceed (family coverage) | $16,100 | $15,000 |
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Common Questions
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a type of checking account that can help pay for future IRS qualified medical expenses for yourself and your eligible dependents. An HSA account lets you set aside money on a pre-tax basis, offering a unique tax advantaged account. You must have a high-deductible health plan to qualify.
What can I use my HSA for?
You can open an HSA to take control of your out-of-pocket medical expenses. Below is a list of what you can use your health savings account for.
- Family medical expenses
- Dental expenses
- Vision care expenses
- Pay for prescription medications or over-the-counter medications when prescribed by a doctor
- Deductibles and co-pays
- After retirement - save now for future out-of-pocket costs, premiums, and long-term care (Age 65 or older)
- For a more detailed listing of qualified IRS medical expenses, visit IRS Publication 502
How do I pay my medical expenses using my HSA5 and how can I contribute to my account?
There are many options to choose from when paying for your current or future healthcare expenses.
- Use your HSA debit card(s)
- Write checks
- eCheck through Internet Banking
- Use your HSA as a savings and reimburse yourself annually, quarterly, or monthly
Contributing to your health savings account is easy. You can use mobile banking, eBanking, or in-person banking to contribute funds into your account. Your employer can contribute to your HSA through direct deposit during payroll. You can set up automatic contributions through a checking account as well.
Do HSA balances rollover to the next year?
Any contributions you make to your HSA are automatically rolled over for future use - even in retirement. Some people choose to add the maximum contribution annually for current or future qualified health care expenses. AbbyBank has an HSA contribution calculator to help you determine the maximum amount you can deposit into your HSA. Even through employment changes, your funds stay with you. Healthcare expenses can grow quickly and unexpectedly, if the funds in your health savings account aren’t enough, you can take control with a personal loan through AbbyBank.
What is the difference between an HSA and FSA?
In order to qualify for a Health Savings Account (HSA), you must be in a High-Deductible Health Plan (HDHP). If your insurance is single or family coverage will determine how much you eligible to contribute into the account annually. Deposits can be made by either you and/or your employer, up to your annual maximum contribution limit. The funds can be carried over from year to year for future qualified expenses. Your HSA will follow you as you change employment, and you needn’t be employed to contribute as long as you have a HDHP.
A Flexible Spending account (FSA) is only offered as part of a benefits package from an employer. It has a lower annual contribution amount. Most have a "use it or lose it" rule, meaning you lose any amount you haven’t spent at the end of the year. However, some employers may allow a maximum rollover of $500. Both may offer some unique tax advantages.
How do I record spending on my taxes5?
Keep all qualifying receipts with your tax records. The account holder will be responsible for noting any contributions and distributions. Having the receipts readily accessible helps the IRS determine whether you used your HSA for qualified medical expenses.
AbbyBank is a full-service financial institution with Wisconsin locations in Abbotsford, Appleton, Gresham, Medford, Shawano, Wausau, Weston and Withee.
1All accounts are subject to credit approval.
2For more information on HSAs visit www.irs.gov and review Publication 969.
3Accounts are subject to additional rules that may prohibit reimbursement of an otherwise qualifying medical expense.
4You must follow the annual contribution limits or penalties may apply.
5Information accurate for 2024 tax year.
6Interest compounded daily and credited to your account monthly.