Solvay Bank

Health Savings Accounts

Health Savings Accounts
Health Savings Accounts (HSA) were created as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. A HSA is a tax exempt account in which you accumulate savings to pay medical expenses that make up your deductible or are not covered by your health insurance plan. A HSA allows you to enjoy unique tax benefits and affordable health insurance premiums without risking your protection. HSAs offer a way to set aside funds to pay for medical expenses for today and tomorrow.

A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. A HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account.

You own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer.

Features

Minimum opening deposit of $50.00
High-yield checking account with tiered interest rates based on balances
Interest paid on any balance over $ 0.01
No Maintenance fee on average daily balance for the month over $2,500.00
Free checks
Free Online Banking and Bill Payment

High Deductible Health Plan (HDHP)
You must have a HDHP if you want to open a HSA. Sometimes referred to as a “catastrophic” health insurance plan, a HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses (i.e., your “deductible”) but will generally cover you after that . Of course, your HSA is available to help you pay for the expenses your plan does not cover.

Qualified Medical Expenses
Health Savings Account funds retain their tax-free status if they are used for the following expenses:

Doctor and dentist visits, prescriptions and transportation to receive medical or dental care
Healthcare coverage if you are unemployed
Long-term care insurance
Certain continuation-of-benefit coverages
Health insurance plans that qualify after age 65

Contribution Limits
The Internal Revenue Service (IRS) reviews and determines the HSA contribution limits on an annual basis.

2007 Limits

Single Policy $2,850
Family Policy $5,650

2008 Limits

Single Policy $2,900
Family Policy $5,800

Individuals age 55 and older can also make additional "catch-up" contributions. The maximum catch-up contribution is as follows:

2008 - $900
2009 and after - $1,000

Tax Benefits of a Health Savings Account
Qualified individuals enjoy significant tax benefits related to paying qualified medical expenses. These benefits are similar to IRA accounts in that:

Savings are never taxed if used for qualified medical expenses
Health Savings Account earnings are tax deferred
Employer or employee contributions to a Health Savings Account are excluded from income
When a Health Savings Account holder dies, the savings become the property of the named death beneficiary, or of the Health Savings Account beneficiary's estate. The spouse of the beneficiary may treat the assets as their own Health Savings Account. Other death beneficiaries must treat such savings as ordinary taxable income.
Savings from an unused Health Savings Account may be used for retirement, but these funds will be subject to a 10% penalty if the Health Savings Account beneficiary has not reached 65, dies or is disabled. Any funds that are not used for medical expenses will be subject to income tax.

Important Note: The information contained in this section is not intended to provide specific advice or recommendations for any individual. We suggest that you consult your financial advisor.

Click on one of the following links for more information:

HSA Information

If you would like additional information about Health Savings Accounts you may contact us by completing and submitting the form below. Click here to view our HSA Quick Reference Guide. You may also call any one of our HSA Account Specialists listed below:

HSA Account Specialists

Name	Branch Office	Phone Number
Mary Rauch	Main	315-468-1661
Sharon Briem	Camillus	315-672-3092
Mary Lynch	State Tower	315-475-8702
Kerri Bower	Fairmount	315-484-7052
Kevin Dwyer	North Syracuse	315-458-7492
Pat Carbone	Liverpool	315-457-7301
Wendy Simmons	Operations	315-468-1661

Licensed Insurance Agents click here to review our HSA Agent Referral Program

HSA Information Request Form
From: (Required) Please include your first and last name.
Company or Organization:
Address:
City:
State:
Zip Code:
E-Mail: (Required) Please include a valid email address.
Home Phone:
Work Phone:
Fax:
Comments: (Required) Please be as detailed as you can.

To transfer an existing Health Savings Account from another institution, click here to qualify & review our disclosure before downloading and printing the Request for Transfer form.

To apply for a Health Savings Account, click here to qualify & review our disclosure before applying online.