HSAs by the Bay

The savings account with the truly healthy return.

Health Savings Accounts. Money for you, when you need it most. At Severn Savings, we're all about the people of our community. That's why we're proud to offer our own Health Savings Accounts (HSAs). Created by the federal government back in 2003, HSAs allow consumers to save money in a tax advantageous manner for medical expenses. Money from an HSA can be used to pay for deductibles, co-pays, medication and other eligible medical expenses.

Is an HSA for YOU?

Do you qualify for the advantages of an HSA?

Any adult can get an HSA so long as they:

• Have health care coverage under an HSA-qualified "high deductible health plan" (HDHP)
• Have no other "first-dollar" medical coverage (You can use our HSA with other insurance such as specific injury insurance, accident, disability, dental care, vision care, or long-term care insurance.)
• Are not enrolled in Medicare
• Cannot be claimed as a dependent on someone else's tax return

The Severn HSA advantage

Your Severn Savings HSA comes with tax breaks and a whole lot of other advantages, including:

• Security: Your high-deductible insurance and Severn HSA protect you against the waiting disaster of high medical bills or, worse, the unexpected bills.
• Affordability: High-deductible insurance and your Severn HSA work together to help you lower your health insurance premiums.
• Flexibility: You can use your Severn HSA to pay for your current medical expenses, or you can save the money for future needs such as: paying for your health insurance if you're suddenly unemployed, paying for your medical expenses after you retire but before you are eligible for Medicare, out-of-pocket expenses when you are covered by Medicare, or for long-term care expenses and insurance.
• Savings: When you save the money in your Severn HSA you have it to use for future medical expenses and you can grow the account through investment earnings.
• Control: Your Severn HSA allows you to make the important decisions. You decide: how much to put into the account; whether to save for future medical needs or pay current expenses.
• Portability: Your Severn HSA goes with you wherever you go, even if you change jobs or medical coverage, lose your job, move to another state, or change your marital status.
• Ownership: Your funds can remain in your Severn HSA from year to year, just like an IRA. You never lose it just because you didn't use it.

Tax Savings

One of the best advantages of your Severn HSA is that it provides you a triumvirate of tax savings, including:

• Tax deductions for the money you contribute
• Tax-free interest or earnings
• Tax-free withdrawals for qualified medical expenses

Be a contributor

You can contribute to your Severn Savings HSA every year that you're eligible. This year you can contribute up to $2,900 for individual coverage, and up to $5,800 for family coverage. You can make your own contributions to your Severn HSA; or your employer can make them; or they can be made by both of you. However, total contributions are limited annually. The good news is if your contribution is made with after-tax dollars, your contribution is deductible on your federal income tax return, even if you don't itemize. You can't continue to contribute once you're enrolled in Medicare, but you can keep the money that's already in your account and use it to pay your medical expenses tax-free.

The high definition HDHPs

If you want to open a Severn Savings HSA you must already have coverage under an HSA-qualified High Deductible Health Plan (HDHP). This health care insurance is exactly what it sounds like: it comes with a high deductible. In other words, the first dollars of medical expenses aren't covered. The HSA is designed to assist you in meeting those first-dollar expenses. According to federal law, to qualify for a Severn HSA, or any HSA, an individual's deductible must be at least $1,100. Deductible for a family policy must be at least 2,200. Usually, to meet federal guidelines, the deductible must apply to all expenses covered by the plan, including prescriptions. On the other hand, your Severn HSA can cover "preventive care" services on a "first-dollar" basis, even without a co-pay. That means pre-natal and well-child care, child and adult immunizations, annual physicals, mammograms, pap smears and more can be paid with the money in your Severn HSA.

In the end

In the unfortunate case of your early death, your Severn HSA can still be an asset. If you're married, your spouse can use it as his or her own. If you're not married, it can be passed on to your beneficiaries or become part of your estate, although it will no longer be treated as an HSA and will become subject to any applicable taxes.

For help and more information
Toll Free: 800.752.5854

24-Hour Telephone Banking:
888.802.9896

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www.severnbank.com