Health Savings Accounts

Health Savings Accounts (HSAs) were created by Congress to combat rising medical costs by providing an incentive for more consumers to pay for current health expenses and save for future qualified medical expenses.

An HSA is an IRA-like account that is designed exclusively for covering medical expenses incurred by the account beneficiary and his or her dependents, and works in conjunction with a High Deductible Health Plan.

You may contribute either all or a portion of the amount of your health plan deductible into a tax-advantaged Health Savings Account.

• Like an Individual Retirement Account (IRA), HSA investment earnings are tax-deferred
• Funds remain tax-free provided they are used to pay for qualified medical expenses
• Unlike Flexible Spending Accounts, unused HSA funds can grow annually, allowing you to save for future medical expenses
• Learn more about new HSA provisions signed into law

Visit our Health Savings Account Service Center to learn more about HSAs, to request application forms or to open an HSA online.

Features of VACU's Health Savings Account

• No minimum balance requirement, $5 to open account
• Free initial order of checks
• Competitive dividend rate ($100 minimum daily balance to earn Annual Percentage Yield)
• Monthly account statements

Your HSA will be set up as two accounts — HSA savings and HSA checking. When you write a check, funds will be automatically transferred from the HSA savings account to the HSA checking account to cover the amount of the check

Eligibility

• Must be covered exclusively by a High Deductible Health Plan (HDHP)
• Cannot be covered by another health plan
• Cannot be enrolled in Medicare or be claimed as a dependent on another person's tax return

Contribution limits
High Deductible Health Plan deductibles and contribution limits are revised each year to reflect cost-of-living increases. Contributions for a particular tax year can be made as late as April 15 of the following year.

2009 contribution limits
The annual contribution limit has been Increased and it's no longer limited to an individual's deductible amount.

In addition to the standard Health Savings Account contribution limits, if you have attained age 55 before the close of a taxable year, you may contribute an additional amount known as a “catch-up contribution." The catch-up contribution limit for 2009 is $1,000.

Tax Benefits

• All contributions are tax deductible
• Earnings (dividends) are tax exempt
• Withdrawals are tax free when used for qualified medical expenses
• Consult your tax advisor to determine if this account is right for you

Federal insurance on your deposits
Virginia Credit Union is federally insured by the National Credit Union Administration, a U.S. Government Agency.

How to open a Health Savings Account
It's easy to apply. You can use our HSA Service Center to apply online. You may also print the forms available in the HSA Service Center, fill them out and return them to credit union by postal mail or at a branch.

Please contact us if you have questions or we can help you in any way.