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Health Savings Account

doctor holding chart and stethoscope

What is a Health Savings Account (“HSA”)?

Commonly known as an "HSA", a Health Savings Account is a tax-exempt custodial account established for the purpose of paying or reimbursing qualified medical expenses for you, your dependents or your spouse. Think of it as a medical IRA!

Just like a regular bank account, the unused money in your HSA rolls over from year to year so you can build your savings to cover future medical expenses - you'll never lose unspent money. And since your HSA belongs entirely to you, it moves with you if you should change jobs.

Frequently Asked Questions about HSAs

Key Details of a Health Savings Account (HSA):

Contributions made by: Employee, other individuals and/or employer
Account owner: Individual
Tax benefits: Pretax contributions; tax-free withdrawals for qualified expenses; tax-deferred earnings
Interest earned: Yes
Contribution limit: Yes, $3,300 individual or $6,550 family (2014)
Withdrawals for non
medical expenses:
Allowed, but taxed 20% effective 2011
Claim receipts must be submitted: No - but employee should keep receipts in case of IRS audit
Unused balance: Money is carried forward and accumulates
If employee leaves the company: Money stays with the employee