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A healthy older couple who have a Health Savings Account are jogging together on a nature trail

Health Savings Account (HSA)

Medical expenses are a major concern for many of us today. So, whether you are covered by your employer or you choose to purchase your own coverage, a High-Deductible Health Plan (HDHP) may be an option for you. But along with a HDHP, you will need a checking account that can help you pay for out of pocket expenses until the deductible is reached and save money: a First Midwest Health Savings Account (HSA).1

HDHP and HSA Benefits

A high-deductible health plan generally costs less than traditional healthcare coverage, so the money you save on health insurance premiums can be put into your First Midwest HSA, where you can enjoy:

  • Total ownership of funds
  • Complete portability even if you change jobs, change your medical coverage, or move to another state
  • Control of your money, including how and when you spend it
  • Greater security – your savings helps protect you against high or unexpected medical bills
  • Significant tax savings on contributions, earnings and withdrawals on qualified medical expenses3

Payments from Your Account

Using your HSA to pay for qualified medical expenses is easy. You are allowed an unlimited number of tax-free payments or withdrawals to pay for qualified, out-of-pocket medical expenses as they occur. And First Midwest makes it easy to make payments or withdrawals from your account by using your Health Savings Debit Mastercard®2 or Online Banking.4

As the owner of your account, you are responsible to report HSA activity by completing and filing Form 8889 with your federal tax return.3 So, hold on to your qualified health care expense receipts to ensure accurate tax filings. It is important to note that First Midwest, as the custodian of your HSA, must report prior year distributions each January on Form 1099-SA.3

Unused Funds

You may not always use every dollar you contribute to your HSA. So, what happens to that left-over money?

Any unused funds that are contributed to your account stay in your account. They do not expire and disappear like a Flexible Spending Account (FSA). Unused funds rollover into the next calendar year and can accumulate in this way year after year. And, you can continue to make your maximum annual contribution regardless of the dollar amount that has rolled over or accumulated.

After age 65, unused funds can be used for any purpose – not just qualified health care expenses.3,5


As a Health Savings Account holder6, you must:

  • Be an individual or employee who is covered by a HSA qualified high-deductible health plan (defined as a plan with a deductible of $1,400 or higher for an individual or $2,8007 or higher for a family)
  • Not be enrolled in Medicare
  • Not be a dependent on someone else's tax return
  • 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 $7,050 for self-only coverage or $14,100 for family coverage.7


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. Contribution limits are determined based on whether an individual or family is covered. For 2022, maximum HSA deposit contributions7 are:

  • $3,650 for an individual; and
  • $7,300 for a family.

For individuals 55 or older, there is a "catch-up" provision that allows you to contribute an additional $1,000 for 2022, as well as subsequent years. The "catch-up" contributions are prorated based on the number of months you are eligible. And, any and all your contributions must be made by April 15th of the following calendar year.

Contributions can be made at any time during a taxable year, up to and including the date for filing your federal income tax return.8 You can also take a one-time, tax-free distribution from your IRA and transfer it to the HSA.

Your First Midwest Banker is ready to answer your questions and help you set up an HSA if you are in a qualified high-deductible health plan.

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1 An HSA is a custodial transaction Account specifically designed for an individual’s health care expenses. You must be covered by an HSA qualified High Deductible Health Plan (“HDHP”), you must not have any other insurance coverage that is not an HDHP, and you cannot be covered by Medicare.
2 No ATM Transaction Fees for the first two (2) non-First Midwest Bank and/or non-Allpoint® ATM transactions (other ATM operators’ ATM fees may apply), a $3 ATM Transaction Fee will apply to each transaction exceeding two (2) per Analysis Period.
3 Consult a tax advisor.
4 The IRS requires that you have funds on deposit before paying for qualified health care expenses. Therefore, you are not permitted to conduct a transaction that would create an Overdraft in the Account. A transaction that would result in an Overdraft will be declined or returned unless prohibited by Applicable Law. You and/or your employer, in addition to other authorized third parties and entities, may make additional deposits to this Account at any time. Withdrawals of funds for non-qualified health care expenses may be subject to income tax and may also be subject to a 20% tax penalty if conducted prior to the age 65. Please consult your tax advisor.
5 May be subject to income tax.
6 To open this account you must be between the ages of 18 and 65. $20 initial account set up fee. Account set up fee is waived if a qualifying direct deposit is made into the Account during the first Analysis Period. Qualifying direct deposits are salary, pension, Social Security, or other regular monthly income electronically deposited to your Account by your employer or an outside agency. Transfers from one Account to another, or deposits made at a banking location or ATM, do not qualify as a direct deposit. Additional fees also include a $100 minimum opening deposit and a $2 monthly maintenance fee. Monthly maintenance fee is waived when you maintain a minimum daily balance of $500. Fees may reduce account earnings.
7 These amounts are for 2022 and indexed annually for inflation by the Internal Revenue Service.
8 Income tax filing extensions are not included in contribution deadlines.