Health Savings Account or HSA is a type of savings account that allows you to pay for out-of-pocket expenses such as deductibles, co-pays, or prescriptions with pre-tax dollars. This is a personal healthcare bank account that you own.
You determine how much you contribute to your account (within 2020 IRS Guidelines: single coverage $3,550 and Family coverage $7,100) and when to use your money to pay for qualified medical expenses. Qualified medical expenses are defined by the IRS and can be found at www.IRS.gov in the IRS publication 502.
Your HSA can be used for your qualified medical expenses and those of your spouse and dependent, even if they are not covered by the HDHP.
You are eligible to open and fund the HSA if:
- You are enrolled in an HSA‑eligible High Deductible Health Plan (HDHP)
- You are not covered by your spouse’s health plan, health care flexible‑spending account (FSA) or health reimbursement account (HRA)
- You are not eligible to be claimed as a dependent on someone else’s tax return
- You are not enrolled in Medicare, Medicaid or TRICARE for Life
- You have not received Veterans Administration benefits during the last 90 days for non‑service related care
UMB Website and Mobile App
Tools to help you manage your HSA
Visit UMB.com or use the UMB Mobile App for:
- Real-time account management 24/7.
- Account balance and transaction history.
- Current and prior year tax information.
- Online transfers to/from HSA.
- Online contributions.
- Online reimbursement.
- Investment options for balances over $1,000.
- Online Bill-Pay and Mobile Banking.
To download the Mobile App:
- Visit your phone’s app store
- Search for “UMB Mobile Banking”
- Click the “Install” Button
How do I enroll in UMB Mobile Banking?
- Visit UMB.com and click on “Enroll in Online Banking”
- Answer the security questions and create your user ID
- and password
- Sign in
- Set up your security profile
- Click ‘Enroll’ under the Mobile Banking tab
- Start Mobile Banking!
From there you can select your accounts, customize your alerts and more.
Frequently Asked Questions
High Deductible Health Plan (HDHP)
A qualified High Deductible Health Plan (HDHP) is defined by the Internal Revenue Service (IRS) as a plan with a minimum annual deductible and a maximum out‑of‑pocket limit. These minimums and maximums are determined annually and are subject to change. The HDHP with HSA offered by Independent Bank is considered a qualified plan.
What is a Deductible?
A deductible is a set dollar amount, determined by your plan, that you must pay, out‑of‑pocket or from your HSA, before the medical plan begins reimbursing expenses at the stated coinsurance for medical expenses.
What is a Health Savings Account?
A Health Savings Account (HSA) is an account, established at a qualified financial institution, that can be funded by your pre‑tax dollars or by your employer, or both. The money in the HSA can be used to help pay for qualified expenses. These may include deductibles, coinsurance and over‑the‑counter medications when you get a doctor’s prescription. In some cases, the funds may be used to pay health insurance premiums.
Who is Eligible to Open an HSA?
Anyone who is:
• Covered by a High Deductible Health Plan (HDHP)
• Not covered under non‑HDHP benefits
• Not eligible to be claimed on another person’s tax return
When Do I Use My HSA?
After visiting a physician, health care facility or pharmacy, your medical claim will be submitted for processing. Your HSA dollars can be used to pay your out‑of‑pocket expenses (deductibles and coinsurance) billed by those providers, or you can choose to save your HSA dollars for future expenses.
How Much Can I Contribute to an HSA?
As noted by federal law for the 2018 calendar year, the annual contribution limits are:
• $3,450 for individual coverage; or
• $6,900 for family coverage
Individuals who are age 55 or older may be eligible to make additional contributions to a maximum of $1,000 for 2016.
What is the Difference Between an HSA and a Flexible Savings Account (FSA)?
• You own the HSA
• An HSA can roll over unused funds from year to year
• Your employer owns the FSA account
• An FSA cannot roll over unused funds from year to year
Can I Contribute to Both an HSA and an FSA in the Same Year?
What Happens to My HSA if I Leave My Job?
You own the account and the money is yours. This means that you can take your HSA with you when you leave and continue to use funds you have accumulated.
Funds left in your account continue to grow tax free. If you are covered by a qualified HDHP, you can even continue to make tax‑free contributions to your HSA.
What Happens to My HSA if I Become Disabled?
If you become disabled and enroll in Medicare, contributions to your HSA must stop on the first of the month in which you become enrolled in Medicare.
If you are older than age 65, you may use your HSA funds to pay Medicare Part A and/or Medicare Part B premiums. Payment of Medicare premiums is a qualified expense and a tax‑free distribution. HSA distributions after you turn 65 that are used for non‑qualified expenses will be subject to ordinary income tax but exempt from penalty.
What Happens to My HSA if I Get a Divorce?
In cases of divorce, an HSA can be transferred between spouses without taxation. This is not considered a taxable distribution. All HSA rules regarding continued tax‑free status, contributions and distributions apply.
What Happens to My HSA if I Pass Away?
Your HSA is an inheritable account. The balance in your HSA will be released to your beneficiary.
Spouse Designated Beneficiary
If your spouse is your designated beneficiary, the account will be treated as your spouse’s HSA after your death. The account will continue to be tax free for qualified medical distributions. If your spouse is covered by a qualified HDHP, contributions to the account may also be made tax free, up to the annual contribution limits.
Other than Spouse Designated Beneficiary
If you designate someone other than your spouse as the beneficiary of your HSA: the account stops being an HSA on the date of your death; the fair market value of the HSA becomes taxable to the beneficiary in the year in which you die (without penalties); and the amount taxable to a beneficiary (other than your estate) is reduced by any qualified medical expenses you incurred prior to your death that are paid from the HSA by the beneficiary within one year after the date of death.
Your Estate is the Beneficiary
If your estate is the beneficiary of your HSA, the value of your account is included on your final income tax return.
What if I Have Other Questions?
Please feel free to contact the Human Resource Department or visit www/umb.com if you have any additional questions.
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