Health Savings Accounts

During the past decade, rising healthcare costs have had an adverse effect on the benefits businesses and organizations can afford to offer their employees, shifting the burden of funding increased healthcare costs to their employees. Adding the First Midwest Bank Health Savings Account (HSA) to your High Deductible Health Plan (HDHP) benefits package will enable your business to improve the benefit choices you offer your employees, and give them greater control over their own healthcare spending.

HSA Eligibility Requirements

To be eligible for an HSA, prospective account holders must meet certain requirements, including:

• Be an individual or employee who is covered by a HDHP (defined as a plan with a deductible of $1,200 or higher for an individual or $2,400 or higher for a family);
• Not be enrolled in Medicare;
• Not be a dependent on someone else's tax return; and
• Have no other first-dollar medical coverage. Other types of insurance, such as specific injury insurance or accident, disability, dental care, vision care or long-term care insurance, are permitted.

In addition, annual out-of-pocket expenses under the plan (including deductibles, co-pays, and co-insurance) cannot exceed $5,950 for self-only coverage or $11,900 for family coverage.

If you meet the eligibility requirements, whether self-employed or even unemployed, anyone can contribute to an HSA on your behalf, including you, your employer or family members. Contribution¹ limits are determined based on whether an individual or family is covered. For 2011, maximum HSA deposit contributions are:

• $3,050 for an individual; and
• $6,150 for a family.

For individuals 55 or older, there is a "catch-up" provision that allows you to contribute¹ an additional $1,000 for 2010 and subsequent years. The "catch-up" contributions are prorated based on the number of months you are eligible. And, any and all of your contributions¹ must be made by April 15th of the following calendar year.

Contributions¹ can be made at any time during a taxable year, up to and including the date for filing your federal income tax return. You can also take a one-time, tax-free distribution¹ from your IRA and transfer it to the HSA.

For more information about Health Savings Accounts, contact us at 800-322-3623 and we'll connect you with a First Midwest On-the-Job Banking Specialist.