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3 advantages to opening a Health Savings Account (HSA)

Today, rising healthcare costs is the No. 1 issue facing many individuals and families in the United States.

At First National Bank, we offer a Health Savings Account (HSA) to help with those costs. This type of savings account is for eligible individuals on a high-deductible healthcare plan. HSAs have several tax advantages, and all funds in the account can be used to pay for qualifying medical, dental and vision expenses.A family at the doctor's office. We are promoting Health Savings Accounts.

Some of those tax advantages1 include:

1. Contributions to your Health Savings Account are 100% tax-deductible up to the annual limit, just like an IRA. Those limits for 2021 are $3,600 for an individual, $7,200 for a family and adults over the age of 55 can add up to $1,000 more.

2. HSAs accumulate interest over the years tax deferred, allowing you to decide when to spend and when to save. And, any money left in the savings account is yours to keep year over year, unlike a Flexible Spending Account (FSA), which is "use it or lose it."

3. Withdraws are tax free as long as they are used for a qualifying medical expense, even in retirement. Below is a list of qualifying medical expenses:

Qualifying Medical Expenses2

  • Chiropractic/Physical Therapy
  • Dental & Optical
  • Prescription Drugs
  • Medical Equipment
  • Nursing & Doctor Services
  • Alcohol/Drug Treatment
  • Prescribed Weight Loss
  • Emergency Care

If you are on a high-deductible plan or expect to move to one next year, please contact one of our personal bankers about opening an HSA. Below are some other great reasons you should open an HSA with us at First National Bank.

Reasons to open an FNB Health Savings Account

  • Tiered interest rates
  • Interest paid monthly
  • Free Checks
  • Debit card available*
  • Use debit card at the ATM, doctor's office, pharmacy, etc.
  • Unlimited Checkwriting
  • Free Internet Banking and Online BillPayer Plus
  • Transfer funds between your accounts
  • Portability - Wherever you go, the account follows

You are eligible3 for a HSA if the following conditions are met:

  • You cannot be claimed as dependent on someone else's tax return.
  • You may not be covered by any other health insurance.
  • You must not be enrolled in Medicare.
  • You must be covered by a qualifying High Deductible Health Plan.

A High Deductible Health Plan (HDHP) is a plan with a minimum deductible and a maximum out-of pocket expense, both of which are shown below.

Coverage Min. Annual Deductible Max. Out-Of-Pocket Expense
Single-Only Coverage $1,400 $7,000
Family Coverage $2,800 $14,000

¹ See your accountant for more IRS details
2 Not limited to these medical expenses.
3 Based on Tax Year 2021 IRS Limits.  Annual service charge may apply.
* Additional fees may apply

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