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Quick Fact
Flexible spending accounts allow you to set aside a certain amount of your paycheck before paying income taxes. During the year, you're then directly reimbursed from your account for qualified health care expenses that aren't covered by insurance or dependent care expenses.


HEALTH SAVINGS ACCOUNTS

HSAs allow employees in High-Deductible Health Plans (HDHP) to establish pre-tax savings accounts to be used for qualified medical expenses. A HDHP for 2010 must have a deductible that is at least $1,200 for self-only coverage or $2,400 for family coverage, and has an out-of-pocket expense limit that is no more than $5,500 in case of self-only coverage, and $11,900 in the case of family coverage.

Earnings on the account may be used to pay qualified medical expenses without incurring any tax liability. Unlike Flexible Spending Accounts (FSAs), the money placed into an HSA does not need to be spent the year it is deposited. In fact, it can be kept in the account indefinitely and used at any later date.

The ability to save money in an HSA allows your employer to offer you medical benefits at more competitive rates, thus minimizing or eliminating the amount you must contribute toward premiums. These savings can be used to fund your HSA while lowering your tax liability and preparing you for your future long-term medical needs

How much can I contribute per year?

For 2010, you may contribute up to $3,050 for individual coverage or up to $6,150 for family coverage. Both individuals and employers can contribute to an HSA, but the limit must not be exceeded. Individuals over age 55 (and not yet enrolled in Medicare) can make additional “catch-up” contributions of up to $1,000 per person for 2010. This can provide extra help to many early retirees.

How does a KEMBA HSA benefit a business?

  • Easy and convenient set-up. A KEMBA representative will come to the place of business during the enrollment period to answer any questions employees or employers have about the KEMBA HSA.
  • Deposits and earnings can continue to grow from one year to the next.
  • Tiered interest rates. The higher the account balance, the higher the interest rate.
  • Employees can make their own payments using their Debit Card or check.


How does a KEMBA HSA benefit individuals?

  • The dividends earned grow tax-free.
  • Reduced income tax liability.
  • Ease of opening an account.
  • Low minimum opening deposit.
  • Tiered interest rates to encourage long term savings.
  • Easy access to funds. Pay with the HSA Debit Card or a check.
  • Portability. The money belongs to the employee. If they change jobs or move, the money stays in the account and is theirs to use on qualified medical expenses.
  • With the tax advantages and benefits of a HSA, employees are in control. Spending health care dollars wisely now can help save for future health care needs.

For more information about KEMBA HSAs, stop by one of our branches, or call 614.235.2395, option 4, or 800.282.6420, option 4.