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Health Savings Account

A tax-advantaged* way to pay for qualified medical expenses

Rising medical costs in California and throughout the country have many people searching for ways to make their health care dollars go further. One of the most powerful tools to help you accomplish that goal is a Health Savings Account (HSA) from San Mateo Credit Union. When coupled with a high-deductible health plan (HDHP), an HSA provides tax-related benefits*, a competitive interest rate, and a debit card and/or checks to pay for your qualified medical expenses.

We'll cover some of the basic features of HSAs here. If you still have questions, don't worry. These are complex accounts, so please don't hesitate to visit your local SMCU branch to get the answers you need.

The triple tax benefit of health savings accounts

HSAs enjoy tax-advantaged treatment that can be great for you as the account holder. Under IRS rules you can enjoy three tax benefits, known as the triple tax advantage:

  1. Your contributions are pre-tax, like a 401(k);
  2. Investment gains inside the HSA are not taxable; and
  3. Withdrawals are not taxed so long as the money is used to pay for qualified medical expenses.

You are eligible to contribute to an HSA if you:

  • Are covered under a high-deductible health plan (HDHP)
  • Are not covered by any other health insurance plan
  • Are not enrolled in Medicare
  • Are not a dependent on another individual's tax return

Yours to keep

The money in an HSA stays with you, and funds are always accessible through a special HSA Visa® Debit Card. That means any unused funds stay in your account - you do not lose the money. And, if you change jobs, change health plans, or retire, you get to keep your account.

To open a Health Savings Account please visit one of our branch locations

SMCU’s custodial charge for a Health Savings Account (HSA) is $15 annually and there is a $100 minimum balance to open the account and to earn interest. Health Savings Account owners are responsible for determining their eligibility, contribution limits, and whether distributions are made for qualified medical expenses. Full account details are available at the U.S. Treasury Department website at

* For specific tax advice, please consult a qualified tax professional.
Additional Information
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 Essentially, the HSA-qualified high-deductible health plan* is health insurance that does not cover first-dollar medical expenses. The deductible must apply to all medical costs covered by the plan, and the HDHP must have:
  • For 2018 and 2019, a minimum deductible of $1,350** for individual coverage and $2,700** for family coverage
  • For 2018, a maximum out-of-pocket limit (including deductibles and co-pays) of $6,650** for individuals and $13,300** for families
  • For 2019, a maximum out-of-pocket limit (including deductibles and co-pays) of $6,750** for individuals and $13,500** for families
HSA funds used for anything other than "qualified medical expenses" are taxable as income and subject to an additional 10% tax penalty. After you turn age 65, or if you become disabled, the 10% additional tax penalty no longer applies. Please consult a tax professional.
 Qualified medical expenses include:
  • Most medical care and services
  • Prescriptions and over-the-counter drugs, such as aspirin
  • Dental and vision costs, even if they are not covered by your insurance plan
  • Healthcare coverage during periods of unemployment
  • Qualified long-term care insurance
You or any other person, including an employer or a family member, can make HSA contributions on your behalf by the tax-filing deadline. Money can be deposited into the account each year that you are eligible, up to the amount specified by law. Maximum HSA annual contribution limits are as follows:
  2018 2019
Individual Coverage $3,450 $3,500
Family Coverage $6,900 $7,000
Visit the U.S. Department of Treasury for more information on the Health Savings Account.

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