Health Savings Accounts
Learn about our Health Savings Accounts and how you can take advantage of this type of savings product.
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged savings account that can be established by anyone with a High-Deductible Health Plan (HDHP) to pay for medical expenses.
Any adult can contribute to an HSA if they:
- Have coverage under an HSA-qualified "high-deductible health plan" (HDHP)
- Have no other first-dollar medical coverage (however, other types of insurance like specific injury insurance or accident, disability, dental care, vision care or long term care insurance are permitted)
- Are not enrolled in Medicare
- Cannot be claimed as a dependent on someone else's tax return
What is a High-Deductible Health Plan?
An HSA-qualified High-Deductible Health Plan* must have:
- A minimum deductible of $1,200 for self-only coverage and $2,400 for family coverage**
- A maximum out-of-pocket limit (including deductible and co-pays) of $6,050 for self-only coverage and $12,100 for family coverage**
In general, the deductible must apply to all medical expenses (including prescriptions) covered by the plan. However, plans can pay for "preventive care" services on a first-dollar basis.
HSA Contributions
You can make a contribution to your HSA each year that you are eligible.
$3,100** Self-only coverage
$6,250** Family coverage
Individuals age 55 and older can also make additional "catch-up" contributions. The maximum annual catch-up contribution is $1,000.
Individuals who are eligible on the first day of the month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch-up contribution, if 55 or older by year end) regardless of the number of months the individual was an eligible individual in the year. For individuals who are no longer eligible individuals on that date, both the HSA contribution and catch-up contribution apply pro rate based on the number of months of the year a taxpayer is an eligible individual.
MassMutual Employees Only: Please note that MassMutual only contributes transition dollars and wellness incentive dollars to eligible employees' CIGNA ChoiceFund® HSAs, which are administered by JPMorgan Chase. Company contributions are not made to accounts managed by other financial institutions.
HSA Features
The HSA account has the benefits and the convenience of a checking account.
Account Features:
- Minimum opening deposit of $5
- No minimum balance requirements
- No monthly service charges
- FREE access to all MMFCU ATMs, including the following surcharge-free ATM Networks: MoneyPass, CO-OP® and SUM
- FREE online access to your accounts using CUOnline Banking
- FREE Call24 telephone access
- Automatic deposits available for employee contributions
- Once you reach age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 10% penalty on the amount withdrawn.
HSA Benefits
The value found in a Health Savings Account applies to your life.
Security: Use your HDHP and HSA to protect yourself against high or unexpected medical bills.
Tax Savings: Your contributions are tax-deductible and the interest you earn is tax-free. Withdrawals for qualified medical expenses are tax-free.
Flexibility: You can use the funds in your account to pay for current medical expenses, including expenses that your insurance company may not cover. Or you can save the money in your account for future needs.
Control: You make all of the decisions: how much money you'll place in the account (up to the allowed yearly contributions), which medical expenses to pay from the account and which company will hold the account.
Ownership: The funds remain in the account from year to year. The money in this account is yours.
Long-Term Savings: Funds accumulate in the HSA, including tax-free interest. Withdrawals for eligible medical expenses are never taxed.
Portability: Accounts are completely portable, meaning you can keep your HSA even if you: change jobs, change medical coverage, become unemployed, move to another state or change your marital status.
Interested in opening a Health Savings Account? Log in to your CUOnline account and click on Online Forms on the top navigation bar. On this page you'll see a link to Open an IRA/HSA – click on the link and follow the instructions to open your HSA.
Want to learn more about HSAs? Visit our Retirement and Health Savings Center.
Have questions? Stop by, call us at 800.940.9466 or email us.
*Other criteria apply. Always check with your insurance provider to be certain that the HDHP you are considering is HSA-qualified.
**2012 amounts. Amounts adjusted annually for inflation.
