Daniel Stewart

Can Financial Institutions Offer HSAs?

A health savings account (HSAs) is a long-term savings plan that can help you pay for medical expenses while benefiting from multiple tax advantages. There are some requirements to be eligible for an HSA. But if you meet those requirements, you can easily open an account and start making contributions.

You can open an HSA from many financial institutions. Many banks and credit unions offer them, and the easiest way to start is to go to the bank where you have your checking and savings account. Alternatively, you can contact your insurance company or employer for a list of financial institutions that offer HSAs.

What are the Requirements to Open an HSA?

HSAs aren't available to everyone. There are a few limitations.

You must have a high-deductible health plan to qualify for HSAs for financial institutions. These plans have lower monthly premiums, making them more affordable than standard insurance policies. However, they have a higher deductible you must cover out of pocket before coverage begins.

An HSA complements an HDHP well because you can use the funds in your account to cover the deductible whenever necessary. You need an HDHP to open an HSA. You must also have no other coverage or Medicare enrollment.

How Much Can You Put Into an HSA?

The IRS sets annual contribution limits for HSAs. They can change yearly, so checking IRS publications or contacting your HSA provider is important. Contributing more than the yearly limit may result in a six-percent penalty.

In 2023, the annual limit for HSAs is $3,850 for individual coverage and $7,750 for family coverage. The limit will rise in 2024 to $4,150 and $8,300, respectively.

Are There Any Fees Associated with an HSA?

HSAs for financial institutions may come with fees. It all depends on the bank or credit union. It's similar to traditional checking and savings accounts. Some banks charge higher fees than others. Check with your provider. It's common to see discounts if you have another account with the same bank.

You may also pay additional fees for transfers and investments.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years' experience in business finance. You can find his thoughts at HSA investment tips blog.