Health Savings Accounts

Health Savings Accounts (HSAs) were created by the Medicare bill and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.

If you are opening an account before your plan effective date, please choose “Make a direct deposit from my account at another bank” in order to avoid potential tax consequences. This will allow the account to open, and you may fund it after the effective date in the manner that works best for you.

Qualifying for an HSA

To be eligible to open a Health Savings Account, you must:

• Be covered under an HSA-qualified “high deductible health plan” (HDHP) that meets the current IRS requirements.

  For 2024 Tax Year

  2024 Tax Year

  	Self - Only	Family
  Annual Deductible (not less than):	$1,600	$3,200
  Total out of pocket expenses cannot exceed	$8,050	$16,100

  For 2025 Tax Year

  2025 Tax Year

  	Self - Only	Family
  Annual Deductible (not less than):	$1,650	$3,300
  Total out of pocket expenses cannot exceed	$8,300	$16,600

• Have no other medical coverage (with some exceptions).
• Not be enrolled in Medicare.
  • You qualify for an HSA if you are eligible for Medicare but not enrolled.
• Not be eligible to be claimed as a dependent on someone else’s tax return.
  • You do not qualify for an HSA if you are “eligible” to be claimed as a dependent, even if you are not actually claimed on their tax return.

HSA Account Basics

Contributions to an HSA are limited annually and can be made by individuals and/or employers. Qualified contributions made to an HSA are deductible when filing federal tax returns even if the person does not itemize.* The total amount of allowed contribution is dependent upon single or family coverage and varies each year.

HSA Contribution Limits

2024 Tax Year

2025 Tax Year

(Limits subject to change as allowed by law.)

An individual can no longer contribute to the account once enrolled in Medicare, although the funds may remain in the account and be used to pay for medical expenses tax-free until the funds have been diminished.

The money in the account can be used for qualified medical expenses allowed under federal law such as medical, dental and vision care in addition to some over the counter medication. The funds can cover expenses associated with the individual holding the account, the spouse or dependent children.

Account holders need to keep all itemized receipts made using the Visa® debit card** or other forms of payment, as you may be required to submit itemized receipts to verify that the transactions were for qualified medical expenses.

Benefits of a Health Savings Account

• Security — saving today for future medical expenses protects you against unexpected medical bills.
• Sustainability — funds remain in the account if you do not use them; there are no "use it or lose it" rules.
• Continuity — HSA owners may keep their HSAs even if they change jobs, move to another state, get married or change medical coverage.
• Control — account holders are responsible for determining where the account is held, what expenses to pay from the account and how much money to invest.

Benefits of a National Exchange Bank & Trust Health Savings Account

• The account is convenient and easy to use. With an HSA Visa® debit card, paperwork is made easy as receipts document the expenses directly debited from your HSA account.
• Additional easy access to your funds through Exchange OnLine electronic banking and checks.
• Small minimum deposit of $50 to open this account.
• No monthly administrative fee if:
  • The account is set up with direct deposit, or
  • $2,500 is maintained in a separate savings, money market, IRA or certificate of deposit, or
  • A $500 daily minimum balance is maintained.
• Free Visa® debit card with no annual fee to access the account.
• Free electronic banking with bill payment.
• First order of HSA checks at no charge.
• Local, friendly service.

Tracking your HSA Expenses

Download this convenient HSA Tracking Document to monitor your expenses and contributions associated with your HSA account. (Accessing this document requires Microsoft® Excel or a compatible program.)