HSA Checking
Frequently Asked Questions:

Once you are covered by a High Deductible Health Plan, its easy to apply for your 1st Source Health Savings Account. Here is some information you should know before applying.

Who is Eligible for an HSA?

Anyone who is:

1. Enrolled in a high-deductible health plan (HDHP)
2. Not covered by any other plan that is not an HDHP
3. Not enrolled in Medicare
4. Not listed as a dependent on someone elses tax return.

Can my spouse and I have a joint HSA?

You and your spouse cannot have a joint HSA. HSA accounts are for individuals only. If you are both eligible, however, you may both have individual HSAs. If you desire you may designate your spouse to be an authorized signer on your account.

How does the HSA Check Card Work?

The 1st Source HSA Check Card is tied to your HSA Checking account and can be used like a debit card. You can use it to pay for qualified medical expenses instead of writing a check. You should not use the card to pay for non  medical expenses or you will be subject to normal income tax and a penalty if you are under age 65.

Who is responsible for ensuring that I am only using my HSA for qualified medical expenses

How you use your HSA is solely between you and the IRS. You should save all receipts and statements that will support the withdrawals reported by the bank to the IRS. At the end of the year the bank will send a form to the IRS telling them your contribution and disbursement totals. You will file a form with your income taxes that breaks down those expenses and enter on your 1040.

What is a Health Savings Account (HSA)?

An HSA is a savings plan used to pay for un-reimbursed health care costs. It is an alternative to traditional health insurance. Participants must be covered by a High Deductible Health Plan (HDHP). An HDHP generally costs less than a traditional health care plan, so money you save on insurance can be put into a HSA. Then, a tax-deductible HSA may be opened to cover current and future medical expenses. The money deposited, as well as any earnings, is tax-deferred. The money can be withdrawn to cover qualified medical expenses tax-free. Unused balances roll over from year to year.

What is a High Deductible Health Plan?

You must have an HDHP if you want to open a HSA. Sometimes referred to as "catastrophic" health coverage, an HDHP is an inexpensive health insurance plan that generally pays after a large deductible is met. In order to quality for an HSA, your HDHP minimum deductible must meet certain deductibles for individual coverage or family coverage.

Who is eligible for an HSA?

To be eligible for a Health Savings Account, an individual must be covered by an HDHP ONLY. They cannot be covered by other health insurance that is not an HDHP. Certain types of insurance are not considered health insurance and will not jeopardize eligibility for an HSA. Those types of insurance include auto, dental, vision, disability and long-term care insurance. You may also have coverage for specific disease or illness as long as it pays a specific dollar amount when the policy is triggered.

Can I start an HSA for my child?

No, you cannot establish separate accounts for your dependent children, including children who can legally be claimed as a dependent on your tax return.

Does an HSA pay for the same things as regular insurance?

HSA funds can pay for any qualified medical expense, even if the expense is not covered by an HDHP. For example, most health insurance coverage does not cover the cost of over-the-counter medicines, but an HSA can. The money spent from the HSA is tax free if used for qualified medical expenses. Keep good records of your expenses so you will have the information at your finger-tips at tax time.

What are qualified Medical Expenses?

Your HSA can be used to pay for qualified medical expenses that apply toward your deductible. Additionally, you can pay for qualified medical expenses that your health plan does not cover. Generally, to be an expense for medical care, the expense has to be primarily for the prevention or alleviation of a physical or mental defect or illness. For a complete list of qualified medical expenses, please refer to Section 213(d) of the Internal Revenue Service Code. Questions about Qualified Medical Expenses should be referred a tax specialist.

Some qualified medical expenses include:

• ambulance service
• dental treatments
• diagnostic services
• doctors visits
• eye exams and eyeglasses
• hearing aids
• hospital services
• laboratory fees
• nursing services
• prescription drugs
• smoking cessation programs
• surgical fees
• therapy services
• vision correction surgery
• wheel chairs and crutches
• X-rays and scans

Can I use the money in my HSA to pay for the medical expenses of a family member?

Yes, you may withdraw funds to pay for the qualified medical expenses of yourself, your spouse or a dependent without tax penalty if you have a family HDHP. If you have individual HDHP coverage you may only pay for qualified medical expenses for yourself.

How do I access the funds in my HSA?

Accessing your funds is simple. Youll receive a 1st Source HSA Check Card that can be used anywhere Master Card is accepted, such as your doctors office and pharmacy. You will also receive HSA checks when you open your HSA Checking account at 1st Source Bank.

Can I use my HSA Check Card to obtain cash?

Yes. Your HSA Check Card will work at any ATM.

Are there any forms I need to file to be reimbursed for medical expenses?

No. You pay for medical expenses with your HSA Check Card or by writing a check from your HSA Checking Account. Keep good records of your expenses so you will have the information at your finger-tips at tax time.

What happens if I dont spend all the funds in my HSA by the end of the year?

Unused funds roll over from year to year.

Who can contribute to my 1st Source HSA?

HSA contributions can be made by any eligible individuals. For an employer sponsored HSA, the employee, the employer or both may contribute to the HSA. Family members may also make contributions to an HSA for another family member as long as the family member is eligible and covered under the High Deductible Health Plan.

How much can I contribute to my HSA?

For 2009 individual coverage, you can contribute the lesser of 100% of the deductible or $3000.

For 2009 family coverage, you can contribute the lesser of 100% of the deductible or $5950.

The regular contribution limit is affected by the HDHP deductible amount and age (if catch-up contributions apply) and is subject to Cost Of Living Adjustments. Contributions made using regular account deposit tickets will be treated as current-year contributions. To make a contribution for a previous tax year (prior to April 15) please see a Customer Desk Representative

What is a Catch-Up Contribution?

An additional contribution is allowed for individuals who are at least 55 and not enrolled in Medicare. It applies to eligible individuals with self-only coverage or family coverage. For 2009, the catch-up amount is $1000.

How does a customer make a catch-up contribution?

Catch-up contributions may be made in a banking center at the desk. Special deposit tickets will be used to identify the catch-up contribution

What happens if I contribute too much to my HSA, and exceed my HDHP deductible?

The IRS imposes a penalty on excess contributions, but allows, under certain circumstances, for corrective distributions to be made. Additionally, you would be required to pay tax on the interest earned on those excess funds. Excess contributions may be withdrawn from the account in a banking center at the desk. Special withdrawal tickets will be used to return excess contributions.

Opening an HSA Checking Account
Apply for your HSA account online, or stop into any 1st Source Banking Center. For a full list of all our locations, click here.