A Health Savings Account (HSA) is a tax-advantaged account established for the purpose of paying medical expenses in conjunction with a high-deductible health care plan (HDHP).

You do not need permission or authorization from the IRS to establish an HSA, as this account can only be set up through a trustee or custodian. A qualified HSA trustee or custodian can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee or custodian
of individual retirement arrangements (IRAs) or Archer Medical Savings Account (MSA).

To qualify for an HSA, you must meet the following requirements:

• Be covered under a high deductible health plan (HDHP)
• Have no other health coverage
• Not enrolled in Medicare
• Cannot be claimed as a dependent on another person’s tax return

Any eligible individual can contribute to an HSA. A person may be self-employed, unemployed, or employed and contribute to his or her own HSA.

Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to a HSA may not be made in the form of stock or other property unless it is a rollover or transfer.

The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. If you have family HDHP coverage, you can contribute up to $6,550. Individuals age 55 or older are allowed to make special “catch-up” contributions in addition to their regular HSA contributions for 2014. The “catch-up” contribution is $1,000.

For more information about HSA accounts or to find out if you are eligible to participate, contact BNC National Bank.