Health Savings Account

Use a Health Savings Account to Pay for Any Qualified Medical Expense

FAQS

• What are the primary tax benefits of an HSA?
  There is a triple tax benefit to an HSA. You can contribute pre-tax dollars, pay no taxes on earnings, and withdraw the money tax-free now or in retirement to pay for qualified medical expenses. This information is not designed, meant, nor does it constitute the rendering of legal or tax advice.
• How much can I contribute to my HSA account?
  The IRS has set annual limits on the amount you can contribute to your HSA. This limit is determined by whether you have an individual or family policy. Health Savings Accounts are subject to a cost-of-living adjustment, and these limits will generally increase each year. The IRS also allows a "catch-up" contribution of $1,000 each year for individuals 55 and over.
  
  2024 Individual Contribution Limit is $4,150 with age 55 or older; you can add an annual catch-up contribution of $1,000
  
  2023 Family Contribution Limit is $8,300
• What is a High-Deductible Health Insurance Plan (HDHP)?
  An HDHP is a plan with typically lower premiums but higher deductibles than traditional insurance plans. A deductible is an amount you must pay out-of-pocket before the insurance company pays for a claim. The premium is the amount of money paid to the insurance company periodically/monthly for the policy.
  
  2021: the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual (self-only coverage) or $2,800 for a family. Visit this IRS resource for more information.
• Do all funds in my HSA need to be used within the year?
  The money in your HSA is yours to keep for life, even if you switch employers or healthcare plans or retire. At the end of each year, any unused funds will continue to roll over for life. In other words, the funds in your HSA aren't "use it or lose it."
• What qualifies as an HSA expense according to the IRS?
  Although qualified expenses are subject to change annually by the IRS, medically necessary costs are generally regarded as eligible. Expenses that are for elective procedures (such as cosmetic purposes) are not. Withdrawing funds for non-healthcare-related reasons (total expenses) may result in penalties. The penalty can be up to 20% of the costs if you're under 65, and the withdrawal is taxable. Visit this IRS resource for more information.
• Can HSA funds be used for retirement?
  If you end up not using your HSA funds for medical expenses, you can save your money for retirement. As long as you are 65 years or older, you are allowed to withdraw funds for non-medical expenses. You may still need to pay income tax upon withdrawal, but you may not have to pay additional penalties.
• What if I already have an HSA?
  If you currently have an HSA at another financial institution, you can transfer or roll over your HSA to Members Choice Credit Union. First, complete the Members Choice Credit Union HSA application. Remember, you must first be a member of Members Choice to open an HSA with us. Your HSA must be opened at Members Choice before you can transfer or roll over funds.
  
  Transfer: Submit an HSA Transfer Request at Members Choice Credit Union, and we will initiate the transaction with the current custodian. This type of transfer is a custodian-to-custodian transfer, and the IRS has not put a limit on the number of these transfers.
  
  Rollover: Withdraw the funds from your current financial institution and deposit them into your new Members Choice Health Savings Account. Remember, you are only given 60 days to move the funds from one institution to the other. Rollovers are only allowed once every twelve months.