Health Savings Account

Health Savings Account

A Health Savings Account (HSA) is a tax-exempt account established for High Deductible Health Plan (HDHP) holders exclusively for the purpose of paying qualified medical expenses.

Anyone who has a High Deductible Health Plan (HDHP) is eligible for an HSA, regardless of his or her age or income bracket. The individual:

  • Must be covered by a high deductible health insurance plan
  • Have no other first dollar medical coverage
  • Cannot be claimed as a dependent on another person’s tax return
  • Cannot be enrolled in Medicare*

*For more information, contact your health insurance provider or benefits administrator.

OPEN AN ACCOUNT

Health Savings Accounts with NBT Bank offer convenience and a variety of benefits to help you manage your medical expenses. An HSA provides you with:

  • Control. An HSA gives you more control over how you plan for and spend your health care dollars. HSA contributions may come from pre-tax income through payroll deductions or from contributions from employers and family members.
  • Portability. An HSA is owned by you, the individual (not your employer), and is therefore completely portable. Funds remain with you even if you change jobs, change medical coverage, become unemployed, move or change your marital status.
  • Flexibility. There are no "use it or lose it" rules. HSA funds remain in the account from year to year. Even if you are no longer eligible to make contributions, funds may still be used to pay for qualified medical expenses, tax-free.
  • Ability to save for future health needs. Unused funds from your HSA can grow through interest and investment earnings and can be banked for future medical expenses. Your accumulating HSA balance gains tax-free interest until retirement at the age of 65. After age 65, HSA funds can be used for non-qualified medical expenses without a penalty, only income tax is assessed.

To fund your HSA, you may authorize recurring payroll deductions, make direct contributions or automatic transfer from your checking or savings accounts. Employers and family members may also make contributions to your HSA on your behalf.

When you have a qualified medical expense that you would like to pay for, you can access the money in your account by using your:

  • HSA Debit card
  • Checks
  • Online Banker
  • ATM
  • Visit your local NBT Bank office

Tax Advantages**

  • Tax Deductible. Contributions to your HSA are tax-deductible up to the IRS allowed maximums.
  • Tax-Deferred. The interest that your HSA earns is tax-deferred and rolls over year after year.
  • Tax-Free. Funds from your HSA used for qualified medical expenses are tax free.

**Consult your tax advisor regarding the deductibility of HSA contributions or charges.

Contribution Limits

Health Savings Accounts are governed by a standardized maximum contribution limit* for individuals, families and individuals age 55 or older. For more information on the current limits and catch up for contributions, please contact your health insurance provider, benefits administrator.

Annual Contribution Limits***

Contribution Year

Coverage

Annual Contribution Limit

Catch up Contribution at Age 55 and Older

2024

Single Coverage

$4,150

$1,000

 

Family Coverage

$8,300

$1,000

2025

Single Coverage

$4,300

$1,000

 

Family Coverage

$8,500

$1,000

***Your accumulating HSA balance gains tax-free interest until retirement at the age of 65. After age 65, HSA funds can be used for non-qualified medical expenses without a penalty, only income tax is assessed.

Qualified Medical Expenses

The following list is a sample of the qualified medical expenses that can be paid for using funds from your Health Savings Account.* For more information, refer to Publication 502 on the IRS website at: www.irs.gov/publications/p502/index.html.

  • Acupuncture
  • Chiropractor
  • Contact lenses and eyeglasses
  • Dental treatments
  • Laboratory fees
  • Podiatrist
  • Prescription medication
  • Therapy
  • X-Rays
  • And more!

  • HSA contributions may come from pre-tax income.
  • Withdrawals from your HSA are used to pay for qualified medical expenses.
  • HSA balances carry over from year to year, building savings for future medical needs over time.
  • Your accumulating HSA balance gains tax-free interest until retirement at age 65. You may withdraw funds upon retirement and pay only normal income taxes.
  • An HSA is owned by an individual, not a company or your employer. It does not terminate when employment ends. It is yours.
  • HSA funds can eventually be used to pay for elder care or long-term care. You can even use HSA funds to purchase long-term care insurance, tax-free.

For detailed and current information on Health Savings Accounts, please visit the following websites:
IRS Publication 969
IRS Publication 502
U.S. Treasury HSA - FAQs

Health Savings Account CDs

Invest unused dollars from your Health Savings Account with a Health Savings CD.