WHAT'S NEW: Health Savings Account Limits for 2011 and Health Savings Account limits for 2012  See a quick 10 page PowerPoint presentation on Health Savings Accounts from First American Bank

Open a Health Savings Account Now!

Take the first step toward defeating runaway health care costs by enrolling in your own self-directed health savings account today.  Just follow these three easy steps for opening and managing a health savings account. 

• Step 1: Enroll in a High Deductible Health Insurance Plan
  To have an Health Savings Account, you must first have a qualified high deductible health insurance plan. We can help you find reputable insurance companies that allow you to enroll in their High Deductible Health Plans online.
• Most popular HSA-qualified insurance plans like Celtic Insurance and UnitedHealthcare now include a built-in Health Savings Account at no additional charge. If so, skip step 2 below.
• Step 2: Open Your Health Savings Account
  After you are enrolled in a qualifying high deductible health insurance plan, just sign up online or download and print an account application and other necessary forms provided by the banks that are the largest national providers of HSA trustee services. Mail the application with your initial deposit. Your new account will be opened and confirmed within a few days. You will receive a "welcome kit" with specific information about managing your account. (There is usually no charge to open an account when you enroll in insurance at the same time. If you enroll separately, there may be an account fee).
• Step 3: Use Your Health Savings Account to Save on Taxes
  You can make deposits, withdrawals, write checks or use your debit card (depending on the options you selected) for immediate disbursements for any qualified out-of-pocket medical expenses. Alternately, you may wish to simply let your money accumulate tax-free in a no-load mutual fund or other investment. Next year when tax-filing season comes around, you will deduct the entire amount of all of the contributions to your Health Savings Account directly from your gross income. It is not necessary to itemized deductions in order to qualify for this tax benefit and it does not matter whether you had any medical expenses.

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  Not Eligible? - Health Savings Accounts are not available to millions of Americans for a variety of reasons. Those not eligible for a HSA may wish to consider other alternative benefit plans that provide similar tax and insurance savings.

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Example of a Health Savings Account in Action

• This example assumes an average household previously had a $500 per person deductible health insurance policy priced at $650 per month and has $1,200 of total family medical and dental expenses for the year of which $400 are covered by a traditional health insurance and none are covered by the HSA insurance (because they fall beneath the policy deductible).  (These are approximately the current national average household out-of-pocket health costs). The example also assumes an arbitrary 25% income tax bracket.
• The traditional health insurance policy has a $1,500 maximum out-of-pocket risk with 3 persons and $500 per person deductible.  The family then switches to an HSA-qualified insurance plan with a $5000 family deductible priced at $325 per month and puts the premium savings plus a little more ($333 per month) into an HSA account.  We assume no investment earnings or loss in the account.
• The result in this example is an overall net decrease in cost from $8,600 to $4,100 for a net savings of $4,500 (or 52% net savings) for the year.