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 Features and Benefits
How Much Can I Put in an HSA?
|2018 HSA Limits||Self||Family|
|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|
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.
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 At age 65, distributions can be withdrawn for non-medical reasons without tax penalty, but federal income tax must be paid on the distributions.
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)
- 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.