Health Savings Accounts
Insure Your Financial Health with an HSA
A Health Savings Account (HSA) is a tax-advantaged checking account that works with a High Deductible Heath Plan (HDHP), letting you set aside a portion of your paycheck—before taxes—into an account to pay for medical expenses that aren’t covered by your plan. It can also help you plan for future medical expenses.
Eligibility
To be eligible to make deposits to an HSA, you:
- Must be currently enrolled in an HSA-qualified health plan
- May not be enrolled in any other non-HSA qualified health plan
- Must be covered under a qualifying high-deductible health plan
- May not have, or be eligible to use, a general-purpose flexible spending account (FSA)
- Cannot be claimed as a dependent on another person’s tax return
- May not be enrolled in Medicare, Medicaid, or Tricare
- Must not have used VA benefits for anything other than preventative services in the past three months

Advantages
Portability
You can take 100% of the deposited funds with you when you retire or change employers. You are the account owner.
Flexibility
You can choose whether to spend the money on current medical expenses or you can save your money for future use. Unused funds remain in the account from year to year and there is no “use it or lose it” provision.
Tax Savings
- Contributions are tax-free, (pre-tax through payroll deductions or tax-deductible)
- Earnings are tax-free
- Funds withdrawn for eligible medical expenses are tax-free.
Premium Savings
An HSA-qualified insurance plan tends to be less expensive than a traditional insurance plan.

Contributions
The annual maximum allowable contributions to an HSA, as established by the IRS, for 2024 are:
- Individual: $4,150
- Family: $8,300
Individuals 55 and older can make an additional catch-up contribution of $1,000 in 2024. A married couple can make two catch-up contributions if both spouses are eligible. The spouses must deposit the catch-up contributions into separate accounts. The annual maximum contribution is based on a calendar year and there is no limit to the dollar balance that can build into the account over time.
Contributions can come from:
- Employee pre-tax payroll withholding
- Employer contributions (non-taxable income)
- Individual contributions from the account owner or other individuals (tax-deductible for account holder)
- IRA or Roth IRA rollover
Distributions
- You, or an authorized signer, can make withdrawals (or distributions) for qualified expenses.
- Distributions from your HSA can be made by check, debit card, ATM, online bill payment, or by request in person or via the telephone.
- Distributions for qualified medical expenses are tax-free.
- Distributions made for anything other than qualified medical expenses are subject to IRS tax plus a 20% penalty. The penalty is waived if the account owner is 65 or older, or due to death or disability.
- Qualified medical expenses for your spouse and your tax dependents’ may be paid from your HSA, even if those individuals are not covered under your high-deductible health plan (HDHP).
- You’re responsible for keeping receipts for all distributions from your HSA. The Credit Union does not monitor how the funds are spent.