Health Savings Account (HSA)
A CP Federal HSA is the perfect tool to build wealth for your health. You gain great tax advantages to increase your earning power while ensuring you have funds set aside for future healthcare needs.
We make it easy to get started, with no minimum balance required. Access the funds easily when needed via MasterCard® debit card, online, or by check. Enjoy the incredible dividend rate...and the peace of mind knowing you have your health covered.
- Summary
- Savings dedicated to paying healthcare costs
- Earn dividends well above regular savings
- Contributions are tax free or tax deductible*
- Dividend earnings accumulate tax free
- Distributions are tax free if used for qualified medical expenses**
- No setup or annual fees
- No minimum balance to open
- HSA owned by you, not employer
- No "use it or lose it" policy
- Easy access by debit card, check, online, teller
- Funds federally insured just like savings accounts
*Pre-tax deposits can be made directly from payroll, before taxes are taken out. If contributions are made after income was taxed, the amount deposited is tax deductible.
**Withdrawals for non-qualified medical expenses are subject to income tax and a 10% penalty. The 10% penalty is waived for persons 65 and over or who have become disabled.
- Eligibility
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- Must be covered under a qualified, high deductible health plan
- Must not have coverage by another type of health plan
- Cannot be claimed as a dependent on another person's tax return
- Cannot be enrolled in Medicare
Contribution Limits
Contribution limits are set by the IRS. Current 2011 contribution limits are:
- $3,050 for a single person
- $6,150 for a family
- A person age 55 or older may make an additional $1,000 in "catch-up" contributions
What's an HDHP?
A high deductible health plan (HDHP) is an alternative health insurance plan to a traditional HMO or PPO plan. As the name implies, an HDHP has a higher deductible than regular health insurance plans. This may mean more out-of-pocket expenses up front. But once the deductible is met, an HDHP typically pays for 100% of covered medical costs. So in the long run, an HDHP usually means less—often significantly less—out-of-pocket expenses.
But what about that initial high deductible?
That's where combining your HDHP health insurance to a health savings account (HSA) comes in. By accumulating funds in your HSA, you will have the cash needed to cover those costs. What's even better is your HSA is tax exempt.
