You may spend the HSA money tax-free on out-of-pocket medical expenses, such as your deductible, co-payments for medical care and prescription drugs, or bills not covered by insurance, such as vision and dental care. Moreover, click here for IRS Publication 969 which contains qualifying expenses.
You can keep the money in an HSA account even after you leave that job, similar to a 401(k). However, you will get stuck with a 20% penalty — plus an income-tax bill — if you use any of the money for non-medical expenses before age 65.
You can keep your HSA at any age, however, you can no longer make new contributions to the account after you have signed up for Medicare. Some people over age 65 who are still working put off signing up for Medicare if their employer offers a high-deductible health insurance policy with an HSA — especially if their employer contributes to the account.
Yes, see rates below.
|BALANCE||DIVIDEND RATE||ANNUAL PERCENTAGE YIELD||MINIMUM OPENING BALANCE||MINIMUM BALANCE TO EARN DIVIDENDS|
|$0 – $499.99||No dividends paid||No dividends paid||$100 for all IRA types. No minimum to open HSA||$500 for all types|
|$500 – $9,999||0.15%||0.15%|
|$10,000 – $49,999||0.25%||0.25%|
|$50,000 – $99,999||0.35%||0.35%|
Truth in Savings Account Disclosures
Health Savings Account Agreement
Except as specifically described, the following disclosures apply to all of the accounts.
1. Rate information.
The Dividend Rate and Annual Percentage Yield on your accounts are set forth above. The Annual Percentage Yield is a percentage rate that reflects the total amount of dividends to be paid on an account based on the dividend rate and the frequency of compounding for an annual period. Dividend Rate and Annual Percentage Yield may change monthly as determined by the Credit Union’s Board of Directors. A withdrawal will reduce earnings.
2. Nature of Dividends.
Dividends are paid from current income and available earnings after providing for the required reserves. The Dividend Rates and Annual Percentage Yields are the prospective rates and yields that the Credit Union anticipates paying for the applicable dividend period.
3. Compounding and Crediting.
Dividends will be compounded and credited as set forth above. The Dividend Period for each account is set forth above. The Dividend Period begins on the first calendar day of the Dividend Period and ends on the last calendar day of the Dividend Period.
4. Balance information.
The minimum balance required to open each account is set forth above. Dividends are Calculated by the Daily Balance method which applies a periodic rate to the balance in the account each day.
5. Accrual of Dividends.
Dividends will begin to accrue on cash deposits on the business day you make the deposit to your term account. Dividends will begin to accrue on noncash deposits (e.g. checks) on the business day you make the deposit to your account. If you close your account before accrued dividends are credited, accrued but unpaid dividends will be paid on term share certificates; accrued but unpaid dividends for all other accounts will not be paid if you close the account before accrued dividends are credited.
6. Transaction Limitations except for checking transactions.
During any statement period, you may not make more than six withdrawals or transfers to another credit union account of yours or to a third party by means of a preauthorized or automatic transfer or telephonic order of instruction. No more than three of the six transfers may be made by check, draft, debit card, if applicable, or similar order to a third party. If you exceed the transfer limitations set forth above in any statement period, your account may be subject to closure by the credit union.
7. Fees could reduce earnings on the account.
Gulf Coast Educators is the trustee of your HSA, which means that we are not responsible for blocking charges that are not qualified medical expenses. It is very important to view the IRS’s Publication 969 if you have questions of what may or may not qualify.
HSA distributions not used for qualified medical expenses are subject to ordinary income tax and, if taken before age 65, a 20% IRS penalty tax (unless the distribution is because of death or disability).
Be sure to consult with a competent tax advisor regarding your HSA deductions and how to claim tax-free HSA distributions.