Health Savings Account

Account Description
  • Allows you to save for the future qualified medical expenses.
  • Funds continue to grow in the account until you need them. You control the investment and use.
  • Federal approved and tax-exempt.
Eligibility
  • You must be covered by a High Deductible Health Plan (HDHP).
  • You may not have other first dollar medical coverage.
  • You cannot be enrolled in Medicare.
  • You cannot be claimed as a dependent on someone else's tax return.
Contributions
  • You must be covered by the HDHP on the first day of every month to make a contribution to the plan for that month. Even if you are not covered by the HDHP for the entire year you may make a full contribution. *See below for further details.
  • If you no longer have a HDHP you can continue to use the funds in your HSA, but you can no longer contribute to this account.
  • You can make a contribution for a prior year as late as April 15th of the following year.
  • Once you reach age 65 you may no longer contribute to the HSA.
  • Self-Only Coverage: You can contribute up to, but no more than $2,850.00.
  • Family Coverage: You can contribute up to, but no more than $5,650.00.
  • If you are 55 years old or above you may make catch-up contributions. They are as follows: 2006-$700.00, 2007-$800.00, 2008-$900.00, 2009 and after-$1,000.00.
Examples of Medical Expenses
  • Medical Care and Service
  • Dental and Vision Care
  • Prescriptions
  • Over-the-Counter Medications
  • Payment of COBRA Premiums
  • Health Insurance Coverage while unemployed and receiving unemployment benefits
Tax Savings
  • Deductible Contributions
  • Tax Free Earnings
  • Tax Free Withdrawals if used for Qualified Medical Expenses
High Deductible Health Plan (HDHP)
  • Self-Only Coverage: A deductible of at least $1,050.00 and out of pocket expenses that do not exceed $5,250.00.
  • Family Coverage: A deductible of at least $2,100.00 and out of pocket expenses that do not exceed $10,500.00.
Account Features
*List of First Federal of Lakewood Disclosures

First Federal of Lakewood will accept deposits from ALL counties within the state of Ohio.

* In the past, you were only eligible to make an HSA contribution for those months that you were a participant in a HDHP. For example, if you started participating in a HDHP on July 1, 2006 and your deductible was $2000.00 you could only contribute $1000.00 because you only participated for 6 months of the year. The contribution amount per month was 1/12 of the deductible. Now that has changed. If you start coverage in a HDHP on July 1, 2007 and are still covered in that HDHP in December of 2007 you are eligible to make a full contribution for the year. That is, instead of making your contribution based on the 6 months that you were participating, you are being allowed to make the full years contribution.

A one time only transfer from a traditional IRA to an individual HSA. The amount transferred cannot exceed the individual's allowable contribution amount to the HSA. That is $2850.00 for single coverage and $5650.00 for family coverage. If you have already made a partial contribution to your HSA for the year, then the amount transferred would be less the amount already contributed. No deduction may be taken for the amount transferred from the IRA.

There is a catch though. If you use either of these new rules, you must remain an eligible participant for a testing period that begins with the last day of the tax year (Dec.31) and ends on the last day of the month 12 months later. (Basically one year.) If for some reason you are no longer covered under the HDHP during the test period, than the contributions that you made in the previous year for the 6 months that you were not participating in a HDHP become included in your income and are taxable to you and a 10% penalty applies to the amount included in your income.