State Farm Bank® deposit products are FDIC insured.

Health Savings Account (HSA)

A Health Savings Account provides tax-deductible contributions, tax-free earnings, and tax-free withdrawals for qualified medical expenses.1 Must be combined with high-deductible health insurance.

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.

HSA Highlights

  • Open your account with $100 or more.
  • Carry unused balances forward from year to year.
  • Interest earned is not taxed.1
  • Contributions to your HSA are tax-deductible2 and may be made by you, your employer, or both.
  • Annual service fee of only $25.3
  • Can write checks, transfer funds or withdraw money when you need it.4

HSA Eligibility

  • HSAs are sole owner accounts with the option to list payable on death (POD) beneficiaries and powers of attorney (POA).
  • Individuals cannot be covered by any other health plan that is not a high-deductible health plan and provides the same benefits as the high-deductible health plan (subject to certain exceptions).4

HSA Features and Benefits

  • Earns a higher interest rate3 than an Interest Checking or Savings account.
  • Ability to use funds for unexpected broken bones or an expanding family.
  • Complimentary ATM card and Money Market checks.
  • Competitive interest rates with interest that compounds daily.
  • Health Savings Visa® Debit Card available to make qualified purchases, cash withdrawals, or ATM deposits.5
  • Visit our HSA calculator.
  • No minimum balance fee with direct deposit.*

How Much Can I Put in an HSA?

2018 HSA LimitsSelfFamily
HDHP Min Deductible$1,350$2,700
Max out of pocket$6,650 $13,300
Max Annual Contribution$3,450 $6,900
Catch-up contributions (55yrs or older)$1,000$1,000

2019 HSA LimitsSelfFamily
HDHP Min Deductible$1,350$2,700
Max out of pocket$6,750 $13,500
Max Annual Contribution$3,500 $7,000
Catch-up contributions (55yrs or older)$1,000$1,000

What is a Health Savings Account?

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.

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.

Withdrawals for Non-Medical Expenses?

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:

  • COBRA insurance
  • Qualified long-term care insurance (subject to the dollar limits in Publication 502)
  • Health insurance premiums for individuals receiving unemployment compensation
  • For individuals age 65 or older, Medicare and retiree health insurance premiums (except for Medicare supplement policy premiums)

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:

  • Covered by a high-deductible health plan (HDHP);
  • Not yet enrolled in Medicare Part A or Part B; and
  • Not listed as a dependent on another person's income tax return.

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.