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Health Savings Account

Helping You Insure Your Future

What is a Health Savings Account?

A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and your dependents.

Features of Centier's HSA

$100 minimum balance to open an HSA
No opening or annual fees
$2 monthly service charge on all balances less than $1,000
Funds will earn competitive interest based on tiered balances
Monthly account statements
View your account balance online

ALSO AVAILABLE:

Mutual Funds*
*Non-deposit investment products such as Mutual Funds that may be held in the HSA are not FDIC insured; are not bank issued or guaranteed; and may lose value.

Am I Eligible for an HSA?

You are eligible to make or receive an HSA regular contribution if, with respect to any month, you:

Are covered under a high-deductible health plan (HDHP) on the first day of the month;
Are not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventive care and limited types of permitted insurance and permitted coverage);
Are not enrolled in Medicare; and
Cannot be claimed as a dependent on another person's tax return.

2011 HDHP Minimum Annual Deductibles

Self-Only Coverage: $1,200

Family Coverage: $2,400

2012 HDHP Minimum Annual Deductibles

Self-Only Coverage: $1,200

Family Coverage: $2,400

Are There Other Requirements for the HDHP?

Yes. For HSA purposes, the HDHP must limit out-of-pocket expenses. The maximum out-of pocket expenses include money applied to your deductible and your coinsurance for covered charges. These limits do not apply to deductibles and expenses for out-of-network services.

2011 HDHP Max. Out-Of-Pocket Expense

Self-Only Coverage: no more than $5,950

Family Coverage: no more than $11,900

2012 HDHP Max. Out-Of-Pocket Expense

Self-Only Coverage: no more than $6,050

Family Coverage: no more than $12,100

How is an HSA Established?

An HSA is established by you in much the same way that you establish an IRA with a qualified trustee or custodian.

Who Can Contribute to My HSA?

If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person (including non-individuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.

What Happens to My Funds if I Do Not Use Them Within the Year?

An HSA is not a "use it or lose it" account. Your funds will not expire if you do not use them within the year. Funds in your HSA rollover into the next calendar year when there is a balance.

How Much Can I Contribute to My HSA?

If you were considered an eligible individual for the entire year and did not change your type
of coverage, you can contribute up to the following limits:

2011 HSA Contribution Limits

Self-Only Coverage: up to $3,050
Family Coverage: up to $6,150

2012 HSA Contribution Limits

Self-Only Coverage: up to $3,100
Family Coverage: up to $6,250

An HSA owner may take a one time (once-in-a-lifetime) tax-free distribution from his or her IRA, and transfer that amount to an HSA. The provision does not apply to SEPs or to SIMPLE retirement accounts.

Catch-Up Contribution Limits

Additionally, a "catch-up" contribution is available for eligible individuals who are age 55 or older by the end of their taxable year and have not enrolled in Medicare. The chart that follows shows these additional amounts.

Tax Year Catch-up Amount

2009 - and after $1,000

If you were not an eligible individual for the entire year, the maximum contribution is prorated for the number of months in which your qualified plan was in force. Any extra contributions over the prorated amount will be subject to tax, including an additional 6% IRS tax penalty.

How Do I Withdraw Funds?

Write a check or use your HSA debit card to pay for qualified medical expenses to your health services provider. You may also make a direct withdrawal of funds from your local Centier branch. It is very important to save your receipts and statements. You will need them to complete your annual tax return.

What are the Federal Tax Benefits of an HSA?

Contributions to an HSA are generally fully deductible, the earnings grow tax deferred, and distributions for qualified medical expenses are tax-free. Consult with your tax or legal professional for guidance.

How Do I Claim the Federal Tax Deduction for My HSA Contribution?

Contributions made by you, your family members, and any other person on your behalf, which do not exceed the maximum annual contribution amount, are deductible by you when determining your adjusted gross income for your federal income tax return. You cannot deduct employer contributions, and these contributions will not count as wages for federal income tax purposes.

When Is The Contribution Deadline For Funding an HSA?

Regular and catch-up HSA contributions can be made at any time for a taxable year up to and including your federal income tax return due date, excluding extensions, for that taxable year. The due date for most taxpayers is April 15.

How Are HSA Distributions Taxed?

Distributions from your HSA used exclusively to pay for qualified medical expenses for you, your spouse, or your dependents are excludable from your gross income. Any other distributions are includable in your gross income and are subject to an additional 20 percent penalty tax on the amount includable, except in the case of
distributions made after your death, your disability, or your attainment of age 65. HSA distributions that are not rolled over will be taxed as income in the year distributed, unless they are used for qualified medical expenses. HSA custodians/trustees are not required to determine whether HSA distributions are used for qualified
medical expenses.

Any qualified medical expenses must be incurred only after the HSA has been established.

What Happens to My HSA in the Event of my Death?

Spouse Beneficiary
If your spouse is the beneficiary of your HSA, the HSA becomes his/her HSA.

Nonspouse Beneficiary
If your beneficiary is not your spouse, the HSA ceases to be an HSA as of the date of your death. If your beneficiary is your estate, the fair market value of the HSA as of the date of your death is taxable on your final return. For other beneficiaries, the fair market value of your HSA is taxable to that person in the tax year that includes such date.

For your reference, please refer to IRS Publication 502 - Covered Medical Expenses and IRS Publication 969 - Health Savings Account. For more information about Centier’s HSA Health Savings Account, contact us at 756-BANK or 1-888-CENTIER.

This brochure is effective for tax-year 2011 and thereafter. This brochure is intended to provide general information concerning federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances. For specific information, you are encouraged to consult your tax or legal professional. The IRS’s web site, www.irs.gov, may also provide helpful information.

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