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HSA? What is that and why should I have one?

This article was provided by Andrew Lee of First National Bank of St. Louis

Health care can be expensive – we understand. At First National Bank of St. Louis we offer health savings accounts that can help. A Health Savings Account (HSA) is a tax exempt account in which funds accumulate to pay for medical expenses. HSAs create tax deductions and, as a result, lower your insurance premiums.

What are the key benefits?

• Contributions are 100% tax deductible
• You have control over when you make contributions and how to invest
• Matching contributions made by your employer are excluded from your gross income
• Funds can roll over from year to year
• Interest is tax deferred
• Funds can be used for qualified medical, vision, and dental expenses tax free

To be eligible you must have a high deductible health plan (HDHP) that covers yourself or your family. You do not have other health coverage and are not enrolled in Medicare. Finally, you cannot be claimed as a dependent on someone else’s tax return. These plans must have an annual deductible of at least $1,200 for an individual or $2,400 for a family.

You can use a debit card or online billpay to access the funds you accumulate in your HSA. The key is that you must use the funds for qualified expenses. Funds you do not use will rollover annually and will remain in the account until you do use them. After age 65, you may use the funds for any expense but those funds will be treated as ordinary income. Only qualified expenses get tax free benefits. (See your tax advisor for details.)

At First National Bank of St. Louis we offer HSA accounts free to our customers where many other banks charge for these accounts. First National Bank has served the St. Louis metropolitan area for over 110 years and focuses on providing the best financial solutions. We strive to exceed our customer’s expectations every day and deliver what we consider legendary service. We know you have a choice and appreciate the opportunity to serve your financial needs.

For more information click here www.fnbstl.com/healthsavings. Click on Personal Services and then on the link to our Health Savings Account pages.