A Health Savings Account (HSA) is an account established exclusively for paying qualified medical expenses. The funds you put into it aren’t taxed; the interest you accrue isn’t either. You can save more for medical expenses, then pay for them using a special HSA Debit Card.
Follow these links to read the most frequently asked questions about HSAs:
HSAs for Families
To be eligible to open an HSA, you must meet the following requirements:
- You are currently covered under a high deductible health plan (HDHP)
- You are not currently enrolled in Medicare
- You are not eligible to be claimed as a dependent on someone else’s federal income tax return
- You are not covered by another non-HDHP health plan
An HDHP is generally defined as any health insurance plan that has a minimum deductible of $1,400 and maximum annual out-of-pocket amount of $6,900 for individual coverage or a minimum deductible of $2,800 and maximum annual out-of-pocket amount of $13,800 for family coverage. The best way to determine if your health plan qualifies is to ask your insurance provider.
How does the account work?
After opening an account, you and your employer can both make contributions to the HSA. Contributions can also be made on behalf of an individual, such as a family member, as long as the individual meets the HSA qualifications. When a qualified medical payment is due, you can pay for it with the accumulated funds in your HSA account. Use your HSA Visa® Debit Card or write a check from your account. You can choose to not use your HSA account for qualified medical expenses and watch the balance grow for future needs.
Here’s a quick account overview:
Open your HSA with a minimum opening balance of just $10
Earn interest on all account balances
We provide checks and an Umpqua Bank Debit Card for easy access to your funds
No annual fee, just a one-time $20 set-up fee
No monthly fee when you maintain the account minimum daily balance of $2,500
How do I apply?
Stop by any Umpqua neighborhood store to open your HSA. Or give us a call at (866) 486-7782. We'll open your account, order your first checks, order your VISA® Debit Card and mail you your new account number, a signature card and HSA application for you to sign and return to us with a statement of your beneficiaries. At the end of each month, we'll send you an account statement. If your employer is making contributions on your behalf, be sure to give your account number to the payroll department.
What are the annual maximum contribution limits?
For 2020, the amount is $3,550 for individual coverage and $7,100 for family coverage. If you are over 55 and eligible for a HDHP, you can contribute an additional $1,000 each tax year. Every year, these amounts change as the IRS adjusts the limits for inflation.
How do I access my account funds?
We offer unrestricted access to your account. That means you can use your HSA Visa® Debit Card, withdraw funds in person at an Umpqua store or write checks from your account. Because your HSA Visa® Debit Card cannot be used at ATMs, there is no PIN to remember.
Can I use my HSA Visa® debit card at locations other than healthcare facilities?
You can make signature-based transactions on your HSA Visa® Debit Card, wherever Visa® Debit Cards are accepted. However, to avoid tax penalties and bank fees, you should use the funds in your HSA account for qualified medical expenses only. Your HSA Debit Card cannot be used at an ATM. To use your card at a point of sale terminal, press CREDIT to let the merchant know you’ll be signing for the transaction instead of using a PIN.
If my insurance provider has a preferred financial institution, do I have to use that institution for my HSA?
No. You can open your account with any financial institution that is an HSA provider. An employer making contributions to your HSA cannot deny contributions if you choose a financial institution other than the one recommended by your employer or their insurance provider.
Can I have more than one HSA?
Yes. If you do have more than one, the maximum fund limit is based on your specific situation, not how many HSAs you have.
What happens when I retire?
If you’re eligible for Medicare and enrolled in Medicare, you are no longer eligible to contribute to your HSA or to open a new HSA account. However, you can continue to use funds. You can even use HSA funds for non-medical expenses without the 20% additional tax if you are eligible for Medicare.
An HSA is a smart way to support your employees by offering a lower-cost healthcare insurance option. Read on for more information.
What is the tax treatment for employee contributions?
Contributions to their HSA can be made on an after-tax basis and taken as an above-the-line deduction on their tax return, or employees can make pre-tax contributions through a Section 125 plan (commonly known as cafeteria plan).
What if I make contributions as an employer?
Employer contributions are excluded from any employee's income. Employers must make comparable contributions to all employees' HSAs unless made through a Section 125 plan.
Does my business structure affect contributions?
Yes. In general, self-employed, partners and S-Corporation shareholders are not considered employees and cannot receive pre-tax employer contributions. Self-employed can only take an above-the-line deduction for their premium and HSA contributions. S-Corporation and LLCs cannot make pre-tax contributions to owners, shareholders or partners.
How can I get my employees on board?
Make it easy to understand. Emphasizing employer contributions and/or employee savings instead of higher deductibles helps. Show HSAs are affordable by providing examples of how much can be saved for future use. Your insurance provider should have these examples or check reliable sources on the internet.
What happens in group enrollment?
First, we’ll develop a plan with you to answer your employees’ questions. We'll also provide account information and applications. If you’re making contributions to your employees' HSAs, we'll get consent to provide you a list of their HSA numbers and talk with you about options for electronic banking to make those contributions. Finally, we'll open all the employee HSAs and send them checks and a VISA® HSA Debit Card.