Tax Advantages

Health Savings Accounts create unique tax benefits for accountholders/individuals.

• Contributions are 100% tax-deductible
• Funds grow on a tax-deferred basis, and if the funds are used for an eligible medical expense, the funds are tax-free
• Funds roll over from year to year, and funds used after age 65 are able to be used tax-free for eligible medical expenses or at your normal tax rate for any other reason

Over the life of your Health Savings Account, you could save thousands of dollars in taxes.

Example: If you had a deductible of $3,000, contributed your maximum amount ($3,000) each year, estimate you will use $500 each year on medical expenses, fell in the 28% tax bracket, have a state sales tax of 5%, you were 40 years old, planned to contribute to your HSA until you were 65 years old and anticipated a three percent average interest rate, you could expect a tax savings of $9,453.89.

Federally qualified Health Savings Accounts are tax-deductible, tax-deferred and tax-free.

Tax-deductible  Contributions to your HSA are able to be deducted from your gross income.

Tax-deferred  HSA funds grow without being subject to taxes until they are used for non-eligible medical expenses.

Tax-free  The funds in an HSA are completely tax-free when used for eligible medical expenses.

Federal vs. State Tax Benefits
Health Savings Accounts are made available through the federal government on a tax favored basis. To determine if your state also provides tax benefits for Health Savings Accounts, please visit our state page or contact your state tax resource.

Eligible Medical Expenses Eligible medical expenses are defined as those expenses paid for care as described in Section 213(d) of the Internal Revenue Code. Additionally, the IRS has allowed some over-the-counter drugs to qualify as eligible medical expenses. ý HSA Banký has created the following lists to help you determine whether an expense is eligible or not. The lists are provided with the understanding that Medequote is not engaged in rendering tax advice. These lists are to serve as a quick reference. For more detailed information, please refer to IRS Publication 502 or contact a tax professional.

What is Best For You? Just click on the worksheet below and run the figures to decide if an HSA works for you and your family. HSA Work Sheet HSA Work Sheet (Example) HSA Bank   Eligible Medical Expenses (For HSA Distributions)   Abdominal supports Abortion Acupuncture Air conditioner (when necessary for relief from difficulty in breathing) Alcoholism treatment Ambulance Anesthetist Arch supports Artificial limbs Autoette (when used for relief of sickness/disability) Birth Control Pills (by prescription) Blood Tests Blood transfusions Braces Cardiographs Childbirth/Delivery Chiropractor Christian Science Practitioner Contact Lenses Contraceptive devices (by prescription) Convalescent home (for medical treatment only) Crutches Dental Treatment Dental X-rays Dentures Dermatologist Diagnostic fees Drug addiction therapy Drugs (prescription) Elastic hosiery (prescription) Eyeglasses Fees paid to health institute prescribed by a doctor FICA and FUTA tax paid for medical care service Fluoridation unit Guide dog Gum treatment Gynecologist Hearing aids and batteries Hospital bills Hydrotherapy Insulin treatment Lab tests Lead paint removal Legal fees Lodging (away from home for outpatient care) Metabolism tests Neurologist Nursing (including board and meals) Obstetrician Operating room costs Ophthalmologist Optician Optometrist Oral surgery Organ transplant (including donor's expenses) Orthopedic shoes Orthopedist Osteopath Oxygen and oxygen equipment Pediatrician Physician Physiotherapist Podiatrist Postnatal treatments Practical nurse for medical services Prenatal care Prescription medicines Psychiatrist Psychoanalyst Psychologist Psychotherapy Radium Therapy Registered nurse Special school costs for the handicapped Spinal fluid test Splints Sterilization Surgeon Telephone or TV equipment to assist the hard-of-hearing Therapy equipment Transportation expenses (relative to health care) Ultra-violet ray treatment Vaccines Vasectomy Vitamins (if prescribed) Wheelchair X-rays

Eligible Over-the-Counter Drugs (For HSA Distributions)   Antacids Allergy Medications Pain Relievers Cold medicine Anti-diarrhea medicine Cough drops and throat lozenges Sinus medications and nasal sprays Nicotine medications and nasal sprays Pedialyte First aid creams Calamine lotion Stop-smoking programs Wart removal medication Antibiotic ointments Suppositories and creams for hemorrhoids Sleep aids Motion sickness pills

Ineligible Medical Expenses Advancement payment for services to be rendered next year Athletic club membership Automobile insurance premium allocable to medical coverage Boarding school fees Bottled water Commuting expenses of a disabled person Cosmetic surgery and procedures Cosmetics, hygiene products and similar items Funeral, cremation, or burial expenses Health programs offered by resort hotels, health clubs, and gyms Illegal operations and treatments Illegally procured drugs Maternity clothes Non-prescription medication Premiums for life insurance, income protection, disability, loss of limbs, sight or similar benefits Scientology counseling Social activities Special foods and beverages Specially designed car for the handicapped other than an autoette or special equipment Swimming pool Travel for general health improvement Tuition and travel expenses a problem child to a particular school Weight loss programs

Ineligible Over-the-Counter Drugs   Toiletries (including toothpaste) Acne treatments Lip balm (including chapstick or carmex) Cosmetics (including face cream and moisturizer) Suntan lotion Medicated shampoos and soaps Vitamins (daily) Fiber supplements Dietary supplements Weight loss drugs for general well being Herbs

Health Insurance may not be purchased with HSA Funds. There are four situations which are exceptions whereby HSA funds can be used to pay for: A health plan during any period of continuation coverage required under any federal law. A qualified long-term insurance contract A health plan during a period in which the individual is receiving unemployment compensation under federal or state law For individuals over age 65, premiums for Medicare Part A or B, a Medicare HMO and/or the employee share of premiums for the employer-sponsored health insurance, including premiums for employer-sponsored retiree health insurance.   How do I apply for a Qualifying High Deductible Health Plan (HDHP)? You must have a qualifying High Deductible Health Plan (HDHP) before you can open a Health Saving Account (HSA) to compare quotes between various providers and get quotes on HDHP qualifying plans simply click the link below or give us a call at 1-800-391-7469.