State Farm Bank® deposit products are FDIC insured.
To open your account, call State Farm Bank at 877-SF4-BANK(877-734-2265). If you are hearing impaired, or do not use your voice to communicate, contact us via 711 or other relay services.
An HSA is a valuable option to save for medical expenses while reducing your taxable income. If you’re anticipating surgery or a new family member in the near future or just planning for an unexpected break, it’s an ideal option.
To be eligible, you must already be enrolled in high-deductible health insurance.
But you may benefit financially in several ways when it comes to taxes. If you follow government guidelines and withdraw funds for eligible expenses, then your money grows tax free and may be used tax free.
Distributions for other than qualified medical expenses prior to age 65 are generally taxable and subject to an additional 20% penalty tax. At age 65, distributions can be withdrawn for non-medical reasons without tax penalty, but federal income tax must be paid on the distributions.
* Refer to the Pricing Schedule for Consumer & Business Deposit accounts and the Truth in Savings Disclosures for more details.
1 Neither State Farm nor its agents provide tax or legal advice.
2 An individual's contributions are deductible for federal income tax purposes, even if the account beneficiary doesn't itemize. Employees' contributions to an HSA are considered wages, and therefore are subject to FICA taxes. Self-employed individuals are not subject to FICA taxes, but pay self-employment tax instead. An HSA contribution doesn't reduce self-employment tax. Employer contributions are made on a pretax basis and are not subject to employment taxes (e.g., FICA). Investment earnings accumulate tax-deferred and, if used for qualified medical expenses, are federal income tax-free.
Generally, health insurance premiums are not qualified medical expenses except for the following:
Generally, a distribution to pay an HDHP is not a qualified medical expense. HSA funds cannot be rolled over tax-free into an IRA.
Customers can fund an Medical Savings Account (MSA) and HSA concurrently. The HSA contribution limit for the year is reduced by the amount of the MSA contributions made for that year. There is no requirement that one account type be funded before the other. An existing MSA can be rolled into an HSA. Balances in MSAs can be rolled into HSAs on a federal income tax-free basis, but it isn't necessary.
If you have plans to make a contribution to an HSA and currently have a hospital indemnity policy or plans to purchase one in the future, then you should consult with your tax advisor about the features offered in the hospital indemnity policy and the possible implications of combining such a policy with a HSA.
3 The $25 service fee, which is debited on the first anniversary of the account activation and annually thereafter, will be considered as part of the annual compensation limit. For example, if the participant's maximum contribution is $3,500, he or she will be able to use $3,475 for distribution and $25 will be retained as the service fee. However, the entire $3,500 will still be deductible for federal income tax purposes.
4 An HSA can be established by an individual who is:
5 Deposits to Health Savings Accounts made at an ATM will count only as current year contributions. With the Health Savings Visa®Debit Card, it is your responsibility to confirm that your withdrawals are for expenses that are qualified medical expenses and qualify for tax excludability. It is imperative to maintain sufficient medical expense records. The records identify that the distributions have been made exclusively for qualified medical expenses and such distributions are, therefore, excludable, from gross income.
State Farm Bank, F.S.B., Bloomington, Illinois ("Bank"), is a Member FDIC and Equal Housing Lender. NMLS ID 139716. The other products offered by affiliate companies of State Farm Bank are not FDIC insured, not a State Farm Bank obligation or guaranteed by State Farm Bank, and may be subject to investment risk, including possible loss of principal invested. The Bank encourages any interested individual(s) to submit an application for any product(s) offered by the Bank. We also encourage you to obtain information regarding the Bank's underwriting standards for each type of credit or service offered by visiting statefarm.com® or by contacting the Bank at 877-SF4-BANK (877-734-2265). If you are deaf, hard of hearing, or do not use your voice to communicate, you may contact us via 711 or other relay services. To apply for a Bank product, you may also see your participating State Farm Agent.