BANKING

Health Savings Account (HSA)

Prepare for the unexpected with tax-deductible contributions, tax-free earnings, and tax-free withdrawals for qualified medical expenses. Pair with a high-deductible health insurance plan to earn a competitive interest rate on your savings today while preparing for tomorrow.

To open your account, contact a State Farm® agent or call State Farm Bank® at 877-SF4-BANK (877-734-2265). Hearing and speech impaired customers, please dial 711.

State Farm Bank deposit accounts are FDIC insured.

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Highlights

  • Open your account today with as little as $100, and never worry about a minimum balance fee.
  • Save and pay for qualified medical expenses tax-free. (See additional details below.)
  • Contributions to your HSA are tax-deductible and may be made by you, your employer, or both.
  • Interest earned is not taxed.
  • Health Savings Visa® CheckCard available to make qualified purchases, cash withdrawals, or ATM deposits.

With our HSA, which works similarly to an interest-bearing checking account, you can pay for qualified medical expenses tax-free, deduct contributions from your income taxes, and accumulate unused funds for expenses in the future.1 With access to your health savings account online, you can even track your payments and contributions easily. This flexible account, combined with a high-deductible health plan (HDHP), is the perfect way to save and pay for medical expenses.

Features and Benefits

  • Open your account today with as little as $100, and never worry about a minimum balance fee.
  • Save and pay for qualified medical expenses tax-free. (See additional details below.)
  • Contributions to your HSA are tax-deductible and may be made by you, your employer, or both.
  • Interest earned is not taxed.
  • Variable, tiered interest rate is applied and is compounded daily.
  • Enjoy the flexibility to use funds for current qualified medical expenses or to save for future needs.
  • Carry unused balances forward from year to year.
  • This account is FDIC insured.
  • Initial 50 checks free
  • Monthly statements available in English or Spanish.
  • Statements available online or by mail.
  • Health Savings Visa CheckCard available to make qualified purchases, cash withdrawals. or ATM deposits2
  • Visit our HSA calculator.

Potential Savings with a Health Savings Account

Typical Health Plan
Family deductible: $1,000
Coinsurance: 80% / 20%
Health Plan with an HSA
Family deductible: $5,400
Coinsurance: 100%
Premium paid: $8,200 $5,200
Your share of medical care expenses ($1,500 claim and $550 in expenses for dental and vision care): + $1,650 + $2,050
Expenses subtotal: = $9,850 = $7,250
Tax savings1 on HSA deposits (Assumes a 28% tax bracket on deposit of $5,400): + $0 + $1,512
Tax savings subtotal: = $0 = $1,512
Net expenses
(out-of-pocket minus savings):
$9,850 $5,738
Total net savings with HSA Plan: = $4,112

In the above example, the covered medical expenses total $1,500 and non-covered expenses total $550 for dental and vision care. Health insurance premiums vary substantially based on age, geographic location, and other variables. Federal income tax savings qualifications assume that contributions are deducted in calculating federal taxes. Withdrawals for non-qualified expenses prior to the age of Medicare eligibility are subject to a 20% federal tax penalty.

1 State Farm Bank and its affiliates do not provide tax, investment, or legal advice. Federal and state tax laws are subject to change. If tax, investment, or legal advice is required, please seek the services of a licensed professional.

2 Deposits to Health Savings Accounts made at an ATM will only count as current year contributions. With the Health Savings Visa® CheckCard, it is your responsibility to make sure that your withdrawals are for expenses that are qualified medical expenses in order to qualify for tax excludability. You must also maintain records of your medical expenses sufficient to show that the distributions have been made exclusively for qualified medical expenses and that such distributions are, therefore, excludable, from gross income.

Additional HSA Details

An HSA is a tax-exempt trust or a custodial account in which you can save money to pay for future qualified medical expenses. Expenses incurred before your HSA is established aren't considered qualified medical expenses. Qualified medical expenses are explained in IRS Publication 969 and IRS Publication 502. An HSA must be used in conjunction with a high-deductible health plan (HDHP), and any growth in the HSA is tax-deferred.

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.

For additional details, consult your financial and/or tax advisor to discuss your specific situation.

State Farm Bank®, Bloomington, Illinois, 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 subject to investment risk, including possible loss of principal invested. Contact State Farm Bank toll-free at 877-SF4-BANK (877-734-2265). Callers who are hearing or speech impaired should dial 711 or use a preferred Telecommunications Relay Service.

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