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What kinds of savings accounts are available?
The IAACU HSA has been initially established to yield the IRA money market rate. In addition, members with over $1,000 deposited into accounts may move money into Certificates (CDs) with maturities of 6 months through 5 years. Penalties may apply for early withdrawal from CDs.
How can I access the funds in my HSA?
The IAACU HSA is established as a no-fee checking account. For your convenience we can provide a checkbook or a debit card free of charge to help manage your expenditures. Funds can also be disbursed by
and we will get you the required forms.
How can I contribute to my HSA?
HSA contributions can be made by deposit, ACH transfer from an existing IAACU account, or by payroll deduction.
Who can contribute to the HSA?
Contributions to HSA can be made by the employer or the individual, or both. If made by the employer, it is not taxable to the employee. If made by the individual, it is an "above-the line" deduction. Contributions can also be made by others on behalf of the individual.
How much can I contribute to my HSA each year?
Your annual HSA contribution cannot exceed the standard limit set by the IRS. If you are age 55 or older, you can also make additional "catch-up" contributions. this has changed as of December 2006 with the Tax Relief and Health Care Act of 2006.
Is there a limit on how much I can contribute?
The most you can put into your account for 2014 is $3,300 if you have single coverage and $6,500 for a family. These amounts will be increased for inflation in future years.
What are the "catch up" contributions for individuals age 55 and older?
Individuals 55 and older who are covered by an HDHP can make additional catch-up contributions each year until they enroll in Medicare. The additional "catch-up" contributions allowed to an HSA account is $1,000.
What are qualified medical expenses?
A partial list is provided in IRS Pub 502 (available at www.irs.gov). There have been thousands of cases involving the many nuances of what constitutes "medical care" for purposes of section 213(d) of the Internal Revenue Code. A determination of whether an expense is for "medical care" is based on all the relevant facts and circumstances. To be an expense for medical care, the expense has to be primarily for the defect or illness. The determination often hangs on the word "primarily."
Who decides whether the money I'm spending from my HSA is for a "qualified medial expense?"
You, the HSA owner, are responsible for that decision, and therefore should familiarize yourself with what qualified medical expenses are (as partially defined in IRS Publication 502) and also keep your receipts in case you need to defend your expenditures or decisions during an audit.
What kind of tax reporting is required for an HSA?
Reporting requirements are straightforward. Form 5498 is used to report total contributions made to the account during the year and the value of the account at the end of the year. Form 1099-SA reports the total distributions taken from the account during the year. Both forms must be sent to the account owner and the IRS.
When is the latest date a member can make a tax free contribution for a prior year?
April 15th, or your required tax filing date.
Do unused funds in a Health Savings Account roll over year after year?
Yes, the unused balance in a Health Savings Account automatically rolls over year after year. You won't lose your money if you don't spend it within the year.
What happens to the money in a Health Savings Account after you turn age 65?
You can continue to use you account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductible, co-pays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or "Medigap" policy.
Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 20% penalty on the amount withdrawn.
Can I roll the money in a Health Savings Account over into an IRA?
You cannot roll the HSA funds over into an IRA. They will stay in the HSA or be rolled into another HSA.
Can I roll over an IRA, 401(k) or other retirement plan into an IRA?
This has changed as of December 2006 with the Tax Relief and Health Care Act of 2006. The bill would allow a one-time transfer of funds from an Individual Retirement Account to an HSA. All other 401(k) or retirement accounts do not qualify.
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© 2012/2013 IAACU & www.iaacu.org | 808 IAA Drive PO Box 2901 Bloomington, IL 61702-2901 |
© 2012/2013 IAACU & www.iaacu.org
808 IAA Drive PO Box 2901
Bloomington, IL 61702-2901