Health Savings Account

Health Savings Account


What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) allows you to set money aside to pay qualified medical expenses in a tax deductible account for people with a qualified High Deductible Health Plan (HDHP).

HSA accounts are tax favored accounts with a financial institution in which you accumulate savings to pay for current and future medical expenses. Contributions to your HSA are tax deductible and income earned on funds in the HSA grow tax-free. See IRS Publication 969 for details.

Contributions can be made to the account during the months the individual is covered under a HDHP up to the IRS limit. Funds placed in a HSA can roll from year to year and do not need to be used in the year they were contributed to the plan.

Funds grow tax free for qualified medical expenses. If funds are used for expenses that are not qualified medical expenses, penalties and taxes apply. Consult your tax professional or see IRS Publication 969 for more details.

For a broader overview of a HSA see the Health Savings Account Custodial Booklet.

Who is eligible to open an HSA?

  • Any individual covered under a qualified High Deductible Health Plan (HDHP).
  • Individuals cannot be enrolled in Medicare or covered under another plan.
  • Individuals cannot be claimed as a dependent on another person's tax return.
  • See IRS Publication 969 for more details.

What can I use my HSA for?

You can use the funds in your HSA to pay for qualified medical expenses, defined by the IRS as amounts paid for the diagnosis, cure, or treatment of a disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate a physical or mental defect or illness incurred by you, your spouse, and your dependents. See IRS Publication 502 for more information.

What are the contribution limits?

  Tax Year



Catch-up Contribution Limit









What is a catch-up contribution?

If you are 55+ at the end of your tax year, you can make an additional contribution to your HSA account per the table above.

Advantages – River Valley Bank HSA

  • No administration fees – there are no set up fees or annual administration fees.
  • No fee checking account – there are no service charges and minimum balances required.
  • Unlimited check writing – you may have unlimited transactions.
  • Access account either by writing a check or using your debit card.
  • No minimum balance to earn interest – tiered rates available based on average collected balance.
  • View account online – view your cancelled checks and/or transactions on line.
  • Year-end reporting – receive tax reporting documents that detail contributions, distributions, and interest earned.