Health Savings Accounts
In light of rising healthcare costs, ETFCU is pleased to offer Health Savings Accounts (HSA) as a way for you to save for medical expenses.
Our HSAs do not have an annual maintenance fee and offer the following benefits:
- Flexibility. Money in the account can be used to pay for any qualified health expense permitted under federal tax law including most medical, dental, and vision services.
- Tax Savings. HSAs also provide tax deductions when you contribute to your account, tax-free earnings on your account, and tax-free withdrawals for qualified medical expenses.
- Control. You make all the decisions about saving for current or future medical expenses and when to make withdrawals.
- Portability. You can continue to use the HSA even when changing jobs or medical coverage, becoming unemployed, changing marital status, or moving to another state.
- Safety. HSA funds are federally insured by the National Credit Union Administration.
You must have an HSA-qualified “high deductible health plan” and meet other requirements to open and contribute to an HSA.
For more information about Health Savings Accounts, be sure to read the HSA Frequently Asked Questions.
ETFCU does not charge annual maintenance fees for Health Savings Accounts, and funds on deposit are federally insured by the National Credit Union Administration. For specific information on ETFCU’s HSA program, call ETFCU at (812) 477-9271 or 1-800-800-9271, Ext. 1284, or send us your question via e-mail. For general information on HSA plans, visit the U.S. Department of the Treasury’s HSA Web page.
HSA Contribution Limits for Tax Year 2020
Health Savings Account contribution limits increased in 2020. The maximum contribution limit for individuals with single coverage is $3,550. The maximum contribution for family coverage is $7,100. Additionally, the “catch-up” contribution limit for those age 55 or older is $1,000.
Visit any ETFCU location to open or contribute to your HSA today!
HSA RatesRates accurate as of September 30, 2020
|Terms||Dividend Rate||APY^||Minimum Balance #|
|Health Savings Checking||1.99%||2.01%||$500|
|1 Year Fixed||0.85%||0.85%||$1,000|
|2 Year Fixed||1.09%||1.10%||$1,000|
|3 Year Fixed||1.19%||1.20%||$1,000|
|4 Year Fixed||1.24%||1.25%||$1,000|
|5 Year Fixed||1.29%||1.30%||$1,000|
HSA Frequently Asked Questions
A Health Savings Account is an account to save for future medical expenses. There are certain advantages in putting money into these accounts, including favorable tax treatment. Contributions to an HSA are deductible and distributions from a HSA are tax-free when used for qualified medical expenses. An individual can invest the assets as he/she wishes, and if the assets are not spent in a given year, the balance can be carried forward to a subsequent year. Unused funds are not lost at the end of the year.
- Adults can contribute to an HSA if they:
- Have coverage under an HSA-qualified “high deductible health plan” (HDHP).
- Are not also covered by any other health plan that is not an HDHP (other types of insurance like specific injury insurance or accident, disability, dental care, vision care, or long-term care insurance are permitted).
- Are not enrolled in Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
- No annual fees or administration fees.
- Check writing available.
- Debit card available.
- Payroll deduction available.
- No minimum balance to open.
- Minimum $500 balance to earn dividends. View current rate here.
- No overdraft privileges.
- NSF fees apply for any returned check or debit card transactions.
- ETFCU will allow authorized user of card/authorized signer on HSAs.
- All HSAs are federally insured by the NCUA up to the maximum limit.
- Online banking, electronic statements, electronic tax forms, and check images are available to HSA owners.
- You may invest reserve funds in an HSA certificate. Funds may not be used to cover any overdrafts on an HSA checking account while invested in a certificate. Certain restrictions apply.
An HDHP is health insurance that does not cover first dollar medical expenses. To qualify, federal law requires the following health insurance deductible minimums:
- $1,400 – Self-only coverage in 2020
- $2,800 – Family coverage in 2020
In addition, annual out-of-pocket expenses under the plan (including deductibles, co-pays, and co-insurance) cannot exceed:
- $6,900 – Self-only coverage in 2020
- $13,800 – Family coverage in 2020
Contributions to the HSA can be made by the individual, employer, or both. However, the total contributions are limited annually. Contributions can be made each year the individual is eligible. Contribution limits for 2020 are:
- $3,550 – Self-only coverage
- $7,100 – Family coverage
Individuals age 55 or older can also make additional “catch-up” contributions. The maximum annual catch-up contribution is as follows:
- 2019 & 2020 – $1,000
Contribution limits for 2019 are:
- $3,500 – Self-only coverage
- $7,000 – Family coverage
Money in the account can be used to pay for any “qualified medical expense” permitted under federal tax law. This includes most medical care and services, dental, and vision care.
The money in the account may pay for medical expenses of the individual, spouse, or dependent children. The account can be used to pay for expenses of a spouse and dependent children even if they are not covered by the HDHP.
Any amounts used for purposes other than to pay for “qualified medical expenses” are taxable as income and subject to an additional 20% tax penalty. Examples include:
Medical expenses that are not considered “qualified.”
Other types of health insurance unless specifically approved.
Medicare supplement insurance premiums.
Expenses which are not medical- or health-related.
After age 65, the 20% additional tax penalty no longer applies. If an individual becomes disabled and/or enrolled in Medicare, the account can be used for other purposes without paying the additional 20% penalty.
^Annual Percentage Yield
#Minimum balance to obtain APY disclosed