Health Savings Accounts

If you need this tax-advantaged account to complement your high-deductible health care plan, we have you covered.¹ And though it is called a Health Savings Account, in fact, you will be able to use it just like a checking account!

• No minimum deposit to open
• Earns interest when daily balance over $1,000 is maintained
• Service charge of $3.00 per month
• IRS reporting of contributions and distributions is performed by ENB
• Unlimited Check Writing
• Unlimited Visa Debit Card use, with no annual fee
• Free, unlimited Online Banking with your computer
• Unlimited Online Bill Pay , P2P and Account to Account (A2A) transfers
• Choose FREE e-Statements with images – or choose paper statements for just $2.00 per month.²

¹ HSA Accounts have many restrictions, requirements, contribution limits, etc. – and are reportable to the IRS.
² Paper statements with no check images are $2.00 per month. Paper statements with images are $5.00 per month

FAQ

(Disclaimer) These questions and answers are intended to provide general information concerning the 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 or under your state laws. For specific information, you are encouraged to consult your tax or legal professional.

Am I Eligible for an HSA?

You are eligible to open an HSA account if:

1. Are covered under a high-deductible health plan (HDHP)
2. 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)
3. Are not enrolled in Medicare
4. Cannot be claimed as a dependent on another individual’s tax return

What is an HDHP?

An HDHP is a high-deductible health plan with an annual deductible no less than $1,400 for self-only coverage and $2,800 for family coverage. These amounts are as of 2022 and will be modified each year to reflect the change in cost of living. Refer to the IRS website for current amounts or your tax or legal professional.

What are an HSA owner’s responsibilities?

You can establish an HSA in much the same way you would establish an IRA – with a qualified trustee or custodian (your bank). Each year, you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distributions.

Who can contribute to my HSA?

Any eligible individual can contribute to an HSA. For an employee’s account, the employer, the employee, or both may contribute.   For an HSA established for a self-employed individual, the individual may contribute.  Family members or others may contribute on behalf of an eligible individual.

How much can I contribute to my HSA?

Contributions are subject to annual cost-of-living adjustments. Catch-up contributions are available for eligible individuals who are age 55 or older by the end of their taxable year and for any months individuals are not enrolled in Medicare. **Refer to the IRS website for contribution limits.

May I claim a federal tax deduction for my HSA contribution?

Contributions to an HSA are tax deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax free. You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes. Rollovers and transfers are from HSAs, IRAs, and Archer medical savings accounts are not tax deductible.

When may contributions be made?

• At any time during the year in which you were an eligible individual for the months in which you were eligible.
• Contributions can also be made for the prior year between Jan 1 and the IRS tax filing deadline, excluding extension.

You can file your return claiming an HSA contribution before the contribution is actually made, but the contribution must be made before the tax filing deadline.

How are HSA distributions taxed?

The qualified medical expenses must be incurred after the HSA has been established. HSA distributions used exclusively to pay for or reimburse qualified medical expenses incurred by you, your spouse, or your dependents are not included in gross income. Any other distributions are included in income unless rolled over. Distributions not used to pay for or reimburse qualified medical expenses or not rolled over are subject to an additional 20% tax unless made after your death, your disability, or your attainment of age 65. HSA custodians/trustees do not determine whether HSA distributions are used for qualified medical expenses.

What is a Qualified Medical Expense?

• Those expenses that would generally qualify for the medical and dental expense deduction. IRS publication 502 explains these qualified expenses in more detail.
• Those expenses incurred by the following persons:
  1. You and your spouse
  2. All dependents you claim on your tax return
  3. Any person you could have claimed as a dependent on your return except that:
     1. They filed a joint return
     2. They had gross income of $3,650 or more, or
     3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s return.

How is HSA activity reported?

Each year, your HSA custodian/trustee (your bank) reports to the IRS on form 5498-SA the contributions made to your HSA and on form 1099-SA any HSA distributions you take. In addition, you file form 8889, Health Savings Accounts (HSAs), as part of your federal income tax return to show your HSA contribution and distribution activity.

What are the benefits of an HSA?

• You can claim a tax deduction for the contributions even if you do not itemize your deductions on Form 1040.
• Contributions to your HSA made by your employer may be excluded from your gross income
• Unused contributions remain in your account year over year, unlike cafeteria plans.   (No “use it or lose it”)
• Interest or other earnings are tax free
• Distributions may be tax free if you pay qualified medical expenses
• The accounts are “portable” so it stays with you if you change employers or leave the work force.