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Health Savings Accounts

Health Savings Account, or HSAs, were created by Congress to combat rising medical costs.

An HSA, is an IRA-like account that is designed exclusively for covering medical expenses incurred by the HSA account beneficiary (the person who establishes the account) and his or her dependents.

HSAs are available to individuals covered by a high deductible health plan (HDHP) regardless of whether the person is self-employed or employed by a small employer and regardless of whether their employer maintains the HDHP.

An HDHP is an insurance policy that meets certain dollar limits as shown in the table below.

2013 HDHP Limits* Self Only Family
Annual Deductible $1,250 or more $2,500 or more
Annual Deductible plus out-of-pocket expenses cannot exceed... $6,050 $12,500

Minimum Balance Rate Annual Percentage Yield
$50.00 .35% .35%


*HDHP and contribution limitations are revised each year to reflect cost-of-living increases.

HSAs can provide significant tax benefits to eligible individuals.

HSA contributions - by employer or employee - are excluded from income.

HSA earnings are tax-deferred.

If used for qualified medical expenses, HSA assets are never taxed.

To learn more about how to take advantage of the many HSA benefits, ask one of our First National Bank representatives for more details.

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