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Health Savings Accounts
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Health Savings Accounts

Balancing Rising Health Care Costs

Health Savings Accounts (HSAs) are available at ICCU to members who have a HSA-eligible high deductible health plan (HDHP). A HDHP generally requires you to pay out of pocket for medical expenses incurred until your deductible is met. Plan coverage kicks in after that. An HDHP may be HSA-eligible if it satifies the IRS' annual deductible and out-of-pocket expense limits. But the rules that define an HSA-eligible HDHP can be complicated so check with your insurance provider or employer to see if your health plan is HSA-eligible. HSA eligibility is determined as of the first day of each month.

In addition to having HSA-eligible HDHP coverage, you:

  • cannot be covered by another health plan (with limited exceptions)
  • cannot be enrolled in Medicare
  • cannot be eligible to be claimed as a dependent on another person's tax return

Talk to a Financial Service Representative to open a Health Savings Account today!


As long as you don't go over the limits that apply to your type of insurance coverage, you can contribute as much as you want, as often as you want throughout the year until your tax return due date (generally April 15th of the following year). In fact, anyone can contribute for you, even your employer.


As you contribute to your HSA account, don't forget about that tax deduction. As long as you cannot be claimed as a dependent on another person's tax return, you can deduct your HSA contributions (except those made by your employer).

Tax-Free Deductions

When it is time to take money out of your HSA, simply use the money for qualified medical expenses. This typically includes most medical, dental, and vision care expenses by you, your spouse, or any covered dependents. HSA distributions not used for qualified medical expenses are subject to ordinary income tax and, if taken before age 65, a 20 percent IRS penalty tax (unless the distribution is because of death or disability). Be sure to consult with a tax advisor regarding your HSA deductions and how to claim tax-free HSA distributions.

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