Health Savings Accounts (HSA)

An HSA is an account that allows you to save money for qualified health care expenses on a tax-favored basis. It’s for people who are covered under a qualified High Deductible Health Plan (HDHP). An HSA is designed to make it easier for people to reach their deductible and save on out-of-pocket costs.

There are many advantages to an HSA:

• Contributions are pre-tax or tax deductible
• Interest and investment earnings are tax free
• Qualified withdrawals or distributions are tax free
• Unused funds carry over from year to year
• You own your HSA.  You can take it with you if you change medical plans, jobs or retire.

Funds in the account may be invested, providing the opportunity for funds to grow at a different rate. To see our investment options, click here.

You can use your HSA tax-free dollars to pay for qualified expenses not covered under your HDHP until you have met your deductible. After you meet your deductible, the insurance company will pay covered medical expenses, minus any coinsurance.

You can pay coinsurance costs with tax-free money from your HSA. In addition, you can use your HSA tax-free dollars to pay for qualified medical expenses not covered by the HDHP, such as dental, vision and alternative medicines.

If the funds in your account are spent on non-qualified expenses, the money you withdraw is taxable—and if you are under age 65, it will be subject to a 20% penalty. 

To be an eligible individual and qualify for an HSA, you must meet the following requirements:

• You are covered under a qualified high-deductible health plan (HDHP) 
• You have no other health coverage—except for the type of plans listed below*
• You aren’t enrolled in Medicare or TriCare
• You can’t be claimed as a dependent on another individual’s tax return

*You can have additional insurance that provides benefits for only the following items:
Liabilities incurred under worker’s compensation,
Tort liabilities or liabilities related to ownership or use of property
A specific disease or illness or a fixed amount per day (or other period) of hospitalization.

*You can also have coverage for the following items:  Accidents, disability, dental care, vision care or long-term care.

Anyone, including your employer or family members, may contribute to your HSA. You can make pre-tax contributions by payroll deduction (if available) or with after-tax contributions.

You are eligible to make contributions to your HSA as long as you meet the definition of an “eligible individual” as described under the question, “Am I eligible to open an HSA?”

If you no longer participate in a high-deductible health plan or enroll in Medicare, you can no longer contribute new funds to your HSA account.

There are many ways to deposit funds into your HSA:

Payroll deductions: If your employer offers the option, you may specify a regular pre-tax contribution to be deducted from your paycheck. Pre-tax contributions will be made before Social Security, federal, and most state income taxes are deducted. If your employer requests your account information, you can find your account number under the profile tab and the Fifth Third Bank HSA routing number is: 042103363.

Employer Contributions: Employers may make contributions to your account and while you do not take a deduction for these contributions, they are excluded from your gross income. NOTE: Employer contributions count against the IRS maximum annual HSA contribution limit.

After-tax contributions: All or part of your annual HSA contributions can also be made “after-tax” to your account. These contributions may be made by logging into your account at 53hsa.com and linking a bank account. Once you have linked a bank account, you can transfer funds by logging into your account on 53hsa.com or via the Fifth Third Bank HSA Mobile App. In addition, you can also send a check in with the mail-in contribution form. NOTE: Pre-tax HSA contributions are reported above the line on IRS Form 1040. Please consult a tax advisor or accountant for professional advice on any deductions.

No, Fifth Third Bank branches cannot accept contributions to your HSA and do not have access to your HSA account information. Any contributions must be completed via your online portal (53hsa.com), your Fifth Third Bank HSA mobile app or via the mail in contribution form. If you are contributing via your on-line portal or via the mobile app, you will need to link a checking or savings account to your HSA.

You can link any personal checking or savings account to your HSA account to send after-tax contributions or receive distributions. Within the online portal, you will go to the profile tab, click on Banking/Cards and then Add Bank Account. This is where you will add your bank account. There is a process used to validate your personal account information prior to utilizing it.

Tax-advantages

• Contributions made through payroll deposits are made with pretax dollars. This means that they are not subject to federal or most state income taxes. 
• Contributions with after-tax dollars can be deducted from your gross income. 
• Any interest or gains (if investing) you earn on your HSA balance is not taxed. 
• As long as the funds you withdraw from your HSA are used for qualified medical expenses, they are not subject to federal income tax.   
• Employers may make contributions to your account; these contributions are excluded from your gross income.

Portability: The money is yours; it grows and remains with you, even when you change medical plans, change employers or retire. There are no “use it or lose it” rules, and funds roll over from year to year. Even if you are no longer eligible to make contributions, funds in your account may still be used to pay for qualified medical expenses tax-free. If you withdraw funds for non-qualified expenses before you turn 65, you’ll owe taxes in addition to a 20% penalty. After age 65, you will owe taxes but not the penalty for withdrawals used for non-qualified medical expenses.

Contributions can come from multiple sources: As long as you are covered by a qualified HDHP, you, your employer, family members, or anyone else may contribute to your HSA up to the IRs maximum annual contribution limit.

Convenience: Fifth Third Bank issues a Mastercard® Debit Card, so you can pay for qualified expenses right away, as long as there are funds in your HSA account.   

A high-deductible health plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. An HDHP is a prerequisite to opening and contributing to an HSA. After your annual deductible is met, you are responsible for a portion of your medical expenses through coinsurance or co-payments, just as with a traditional health plan.

The minimum deductible and maximum out-of-pocket expenses are indexed annually for inflation by the IRS and US Department of Treasury. Select the links here for IRS guidelines on:

Minimum HDHP deductible

Maximum Out of Pocket Expense

Insurance carriers will label their plans as HSA-eligible. In addition, your employer can verify the HSA eligibility of your coverage.   

To be an HSA qualified HDHP plan, the following criteria must be met:

• Minimum HDHP deductible

• Maximum Out of Pocket Expense

• No insurance coverage until the deductible is met except for the following expenses:
  • Health insurance premiums
  • Wellness and preventative care
  • Expenses resulting from accidents
  • Dental expenses
  • Vision expenses

Both HSAs and FSAs are tax-advantaged accounts that allow people to save money to pay for qualified medical expenses. Their key differences are listed below:

Health Savings Accounts (HSAs)

• Must be established in conjunction with a HSA-qualified HDHP and contributions can only be made while covered under that plan.
• Funds in the HSA remain with the employee when they leave their employer.
• Funds are not forfeited. Unused funds at the end of the calendar year rollover to the following year.
• HSAs can earn interest as well as be invested. Any growth in funds is tax-free.
• You can change your contribution amount at any time during the year.

Flexible Spending Accounts (FSAs)

• No eligibility requirements
• Funds must be used for expenses during the calendar year or they will be forfeited. Some employers do allow for a portion of the funds to carry over to the following year.
• If you leave your employer, any unused funds will be forfeited unless you are eligible for FSA continuation through COBRA.
• Contribution amounts are selected only at open enrollment and can only be adjusted if there is a change in employment or family status.

If you qualify for an HSA, you cannot elect to set up both an HSA and a Medical FSA. If your employer offers a Limited Purpose FSA, you may choose that in addition to an HSA. You may use Limited Purpose FSA dollars to reimburse yourself for dental and vision expenses not covered by your high-deductible health plan.

No. There is only one accountholder for a Health Savings Account. In the case of married individuals, each spouse, who is an eligible individual and wants to have an HSA, must open a separate HSA. Married couples cannot have a joint HSA even if they are covered by the same HDHP. However, distributions can be used to cover qualified expenses of the other spouse.

If both you and your spouse have family coverage under qualified high-deductible health plans, your combined contributions cannot exceed the IRS annual limit for family coverage. Contributions can be divided between you and your spouse in any manner. If you and/or your spouse are eligible to make catch-up contributions, you can make a catch up contribution but it must be to your individual HSA. 

You may have more than one HSA and, as long as you are currently enrolled in a HDHP, you may contribute to all of them. Keep in mind that your total contributions to all of your accounts can not exceed the IRS maximum contribution limit.

Yes, you can have both an HSA and an IRA.  An HSA is a tax-advantaged account designed for current and future qualified medical expenses. 

No. Only individuals that are covered solely by a qualified HDHP are eligible to contribute to an HSA.  

No, only cash can be contributed to your HSA, however, once your cash threshold is met, you are eligible to invest funds into a variety of mutual funds. To see our list of investments, click here .  

No, you can always choose to pay your eligible expenses out of pocket and allow your HSA dollars to grow tax free. You will want to keep all receipts so that you can reimburse yourself at a later time.

For a complete list of qualified medical expenses, please refer to IRS Publication 502.

Your HSA funds may also be used to pay your Medicare Parts A and B premiums and for employer-sponsored retiree plans.

HSA Funds can be used to cover medical expenses for dependents. A dependent is someone you claim as a dependent on your taxes. A dependent is anyone you claim as an exemption on your taxes; most often it is a spouse or child.

You will need to complete the HSA Contribution Form and mail the form and a check for the original distribution amount to the address on the form.

If you become disabled and enroll in Medicare, contributions to your HSA must stop as of the first of the month in which you become enrolled. You can continue to use your HSA funds to pay Medicare Part A and B premiums. If you use your funds for qualified medical expenses, the distributions from your account remain tax free. If you use the funds for non-qualified expenses, the distribution becomes taxable and may be subject to a 20% penalty.

You are the account owner of your Health Savings account. When you leave your employer, the funds in your HSA are still yours. You can leave them in your existing HSA, or you can transfer the funds to another custodian. Your HSA is portable, which means that you can take your HSA with you. Funds left in your account continue to grow tax-free. If you are subsequently covered by an HSA-qualified HDHP, you can continue to make tax-free contributions to your HSA.

Even if you are no longer eligible to make contributions to your HSA, you can still use the HSA funds to pay for qualified medical expenses for you, your spouse and eligible dependents. 

Yes, as long as the distributions are used for qualified medical expenses.

If you enroll in Medicare, you are no longer eligible to contribute to your HSA.

If you have not yet enrolled in Medicare and are covered under a HSA qualified HDHP, you can still make contributions to your HSA.

You may continue to use your HSA funds tax-free for qualified medical expenses. If you use your funds for non-qualified expenses, the distribution becomes taxable; however, since you are 65 or older, you may be exempt from the 20% penalty.

Your HSA is an inheritable account. Your funds will be dispersed according to your beneficiary information:

Your spouse is designated beneficiary. Your HSA funds will continue to remain HSA funds after your death. Your spouse will need to open an HSA in his or her name, and the funds can be moved into the new HSA tax-free. If your spouse is covered by a qualified HDHP, contributions can still be made into the account up to the IRS annual maximum contribution limits. 

Someone other than your spouse is designated beneficiary. Your account stops being an HSA on the date of your death. In addition:

• The fair market value of the HSA becomes taxable (without penalties) to the beneficiary in the year in which you die.
• Also, the amount taxable to a beneficiary (other than your estate) is reduced by any qualified medical expenses you incurred prior to your death that are paid from the HSA by the beneficiary within one year after the date of death

Your estate is designated beneficiary. If your estate is the beneficiary of your HSA, the value of your account is included on your final income tax return.

NO designated beneficiary on file. If you do not have a beneficiary on file, the funds are payable to the account holder’s estate.

If you would like to set up your beneficiary information, within the online portal, you will go to the profile tab and click on Add Beneficiary.  An additional option is to complete the beneficiary form and send to the address on the form.

Yes. The IRS determines annual contribution limits and they can be found here.

There are no tax penalties for closing an HSA. However, if you use HSA funds for other than qualified medical expenses, those distributions will be subject to ordinary income tax, and, in some cases, a 20 percent penalty.

The 20 percent penalty will be due and payable when you file your annual tax return for the year in which you took the distribution for non-qualified expense(s).

Regardless of whether or not you are eligible to contribute to an HSA, distributions from your HSA used exclusively to pay for qualified medical expenses for you, your spouse or IRS qualified dependents are excluded from your gross income.   

If you take a distribution for a non-qualified expense, you are subject to ordinary income tax and a 20 percent penalty tax. If you are age 65 or older, disabled, or for the year in which you die, the 20 percent penalty may not apply.

Form 1099-SA notifies the IRS of distributions made from your HSA during the tax year. This form is mailed no later than January 31 of the following plan year. Form 5498-SA notifies the IRS of contributions made to your HSA during the tax year. This form is mailed no later than May 30 of the following plan year.   

Contributions, interest, investment earnings, and distributions for qualified medical expenses are all exempt from federal income tax, FICA (Social Security and Medicare) tax and most state income taxes.

Yes, you will need to complete the HSA Transfer Form and send it to your current HSA custodian.

You can only rollover HSA funds into a different HSA.   

The IRS does allow a one-time transfer of funds from an IRA to an HSA. The transferred amount, when combined with other HSA contributions for the year, may not exceed your annual maximum contribution. You will need to complete the HSA Transfer Form and mark the transaction type of “IRA to HSA Transfer”.

After making an IRA to HSA transfer, you must continue to participate in a qualifying HDHP for 13 consecutive months, beginning in the month of the IRA to HSA transfer. If you do not, you will be subject to income taxes and a 20 percent penalty tax on the transferred amount, except in the case of death or disability.

You may contribute to a Limited Purpose FSA or Health Reimbursement Arrangement (HRA) and an HSA at the same time provided that the Limited Purpose FSA or HRA do not pay first dollar for any benefit that is covered by the HDHP. However, you may not contribute to an FSA and an HSA at the same time. You will want to refer to your benefits department or check the IRS website for additional information regarding plan eligibility.

We are sorry that you would like to leave. In order to have your Fifth Third Bank HSA funds sent to another HSA custodian, you will need to obtain a transfer form from the new custodian. Once completed, you will need to be mail the Transfer Form to:

Fifth Third Bank
ATTN:  HSA Operations
PO Box 638323
Cincinnati, OH  45263