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American Bank Health Savings Account
What is a Health Savings Account (HSA)?
A product of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
HSA’s became available in January 2004 and are one of the hottest new products to arrive on the
scene in years. HSA’s are designed to cover medical expenses incurred by the HSA account owner
and his or her dependents. HSA contributions are tax deductible and, if amounts are used for qualified
medical expenses, distributions of contributions and earnings are tax-free.
Individuals who meet the following criteria may open an HSA:
- Must be covered under a qualified High Deductible Health Plan (HDHP).
- Not covered by another health plan that is not a HDHP.
- Not enrolled for Medicare benefits.
- Not eligible to be claimed as a dependent on another individual’s tax return.
- Must be enrolled in a qualified HDHP on the first day of the month that the account is opened.
Terms/limits of a qualified HDHP for 2008:
Single coverage:
- Annual deductible of at least $1,100.
- Total annual out of pocket expenses cannot exceed $5,600.
Family coverage:
Family coverage is defined as any coverage other than self-only coverage. Further,
family coverage is a health plan covering one HSA-eligible individual and at least one other individual
whether or not the other individual is an HSA-eligible individual.
- Annual deductible of at least $2,200.
- Total annual out of pocket expenses cannot exceed $11,200.
Note: Each year these amounts will be indexed for cost-of-living adjustments
and, as a result, are subject to change.
What are the benefits of an HSA?
- Save on Federal income taxes. The contributions you make are deductible, up to the lesser of
the annual insurance deductible or the HSA maximum contribution (including age 55 catch-up
contribution), when determining your adjusted gross income. Account balances grow tax-free.
- Cover deductibles and qualified out-of-pocket expenses. Account balances can be used to pay
for any qualified medical expense incurred after the HSA is opened. Withdrawals used to pay for
qualified medical expenses are tax-free.
- Take control. You determine which qualified expenses will be paid from your HSA, how they
will be paid and when.
- Benefit from no “use it or lose it” restrictions. Unlike Flexible Spending
Accounts, unused balances can be carried over from year-to-year and continue to grow on a tax-free
basis.
- Use HSA dollars to pay COBRA premiums. Preserve your liquidity between jobs or during times
of unemployment. Special tax-free withdrawals permitted.
- Purchase long-term care insurance. Use the tax-deferred dollars in your HSA to plan for
long-term needs.
- Supplement retirement income. Once you enroll in Medicare, you may use HSA balances to pay
for out-of-pocket Medicare expenses tax-free, or choose to use HSA balances for non-medical purposes
by claiming the amount of the withdrawal as income for tax purposes, penalty-free.
Why Choose American Bank for your HSA?
- It’s easy to open. Just visit any of American Bank’s six locations and speak to a
customer service representative.
- It’s easy to use. The American Bank HSA works like a checking account. Money can be
deposited into the account at any time and easily withdrawn for qualified medical expenses when
needed. The customer can use an American Bank HSA Debit Card, American Bank’s Online Banking
with Bill Payment or personalized HSA checks to make payments for qualified medical expenses.
- It’s easy to watch your money grow. American Bank’s Online Banking with free Bill
Payment allows customers to review balance and transactions conveniently, make account transfers
and easily track spending and pay bills.
- It’s easy to save money. American Bank offers competitive interest rates that enable
tax-free balances to grow.
- It’s easy to speak with us. American Bank believes that the customer should always have
the ability to speak directly with a customer service representative.
The American Bank HSA NOW Account.
Minimum Balance:
A minimum deposit of $10.00 is required to open the account. A minimum balance fee of
$3.00 will be imposed each statement period if the daily ledger balance falls below $500 any day of the
statement period. No minimum balance fee will be imposed if a direct deposit is credited at least
monthly.
Interest :
The interest rate will be tiered at the following levels:
HSA NOW
| Amount |
APY |
Interest Rate |
0-9,999 |
1.50% |
1.49% |
10-24,999 |
1.60% |
1.59% |
25-49,999 |
1.75% |
1.74% |
50,000+ |
2.00% |
1.98% |
Last Updated Mon Oct 06 2008
APY = Annual Percentage Yield
Rates are subject to change
Fees could reduce earnings
The interest rate and annual percentage yield may change at the discretion of the bank
at any time.
- Balance Computation Method:
The daily balance method to calculate interest will be utilized. This method applies a daily
periodic rate to the collected balance in the account each day.
- Compounding and Crediting:
Interest will be compounded and credited to the account monthly.
- Accrual of Interest on Deposits Other Than Cash:
Interest begins to accrue no later than the business day we receive credit for the deposit of
the non-cash items (for example, checks).
- Statements:
You will receive monthly statements. Checks will not be returned with the statement.
Opening an American Bank HSA NOW Account.
Please contact your benefits plan administrator or insurance professional to ensure
that you are eligible (meaning you are enrolled in a qualified HDHP) and that you completely understand
how an HSA works. Then contact American Bank at any of our convenient locations to establish your HSA and set up a contribution program.
Questions and Answers About HSA accounts?
For detailed information regarding Health Savings Accounts, please visit the U.S.
Treasury Web site at http://www.treasury.gov/offices/public-affairs/hsa/
or see your tax professional. For more information about American Bank Health Savings Accounts, please call us toll free
at 1-888-509-9292.
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