A Health Savings Account (HSA) is an account that you and your employees can place pre-tax dollars into to pay for current medical expenses, or save for the future. As healthcare needs arise, your employees select when and where they seek treatment – and pay from their tax-free HSA account.

If the money is not spent, the dollars contributed to their account are theirs to keep. Dollars remain in the account and grow tax-deferred to be spent after age 65. (similar to an IRA or a 401k).

Employees choose their contribution level, and your account is funded with pre-tax dollars. In 2008 an individual may contribute up to $2,900 and a couple up to $5,800 a year. Enrollees over age 55 can make an additional "catch-up contribution"($900 for 2008 and $1,000 for 2009). As healthcare needs arise, employees choose when and where to seek treatment and pay for it from their tax-free HSA account. You must have a HDHP A High-Deductible High-Premium (HDHP) Policy is a health insurance policy with a high deductible. The HSA covers the deductible before the (HDHP) begins paying coverage. A High-Deductible High-Premium (HDHP) Policy, combined with an HSA, allows the owner to make tax-free withdrawals to pay for medical care that's not covered by your plan. Participants pay medical expenses using pre-tax dollars. There is no “use it or lose it” provision. Unspent dollars are treated like a tax-sheltered savings platform.

• Both you and your employees may contribute to the health savings account, using pretax dollars.


• Employees don’t have to use their HSA this year. What is not spent continues to grow, and can be treated it like a tax-sheltered savings plan to be used for medical expenses, retirement, or both


• As long as the money is spent on qualified medical expenses, there are no taxes. At age 65, the money can be spent on anything you want. You pay no taxes on withdrawals spent for qualified medical expenses. Any other withdrawals are taxed as ordinary income.

Step 1: Enroll
Because your qualified healthcare and medical expenses are paid with pre-tax dollars from your HSA account, you get one dollar of value for approximately 70 cents - depending on your tax bracket.

Step 2: Participate
After you have signed up for your HSA benefit, Pilot will provide you with all the materials you need, including:

• Your HSA Welcome Kit.
• Customer Support Center Contact information.
• Information on accessing your HSA bank account.
• End-of-the-year tax reporting reminders and support.

How does an HSA save taxes?   Without HSA With HSA Annual Wages $40,000 $40,000 Expenses Paid by HSA N/A $3,000 Taxable Wages $40,000 $37,000 Expenses not paid by HSA $3,000 N/A Take Home Pay $27,000 $27,750 Savings from HSA N/A $750 Contributions limits You may contribute up to the maximum allowed by law. Contribution amounts are based on IRS limits   2008 2009 Self Only (Single) $2,900 $3,000 Family $5,800 $5,950 Catch up contribution (Age 55) $900 $1,000 Maximum contribution amount is indexed for inflation and will be adjusted annually.

Because your qualified healthcare and medical expenses are paid with pre-tax dollars from your HSA account, you get one dollar of value for approximately 70 cents - depending on your tax bracket.

Contact us
Whenever you have a question, contact your Habersham Bank representative at 866 719-6039. Contribution limits and important account information change on an annual basis, so please feel free to ask us.