Frequently Asked Questions

Simply click on any of the questions to view the answer or scroll down to see all of the questions and answers.
Please scroll down for IRS Materials.

New Health Law's Impact on HSAs

  1. How does the new law affect reimbursable expenses?
  2. Can I continue to contribute the same amount to my HSA?
  3. I heard that FSAs are now limited to $2,500, does that rule apply to HSAs?
  4. What happens to my HSA balance in the case where I can no longer contribute new money?
  5. Should I change anything based on the new law?

Employer FAQs

  1. When does the HSA have to be established?
  2. Does an employer have to make contributions to an employee’s HSA?
  3. May an employer fully fund the employee’s HSA at the beginning of the year?
  4. Are employer-made HSA contributions deductible health care expenses?
  5. Can employers make pre-tax contributions to their employees’ HSAs?
  6. May employers make matching contributions?
  7. Can you coordinate an HSA with a cafeteria plan?
  8. Is the employer responsible for reviewing medical expenses?
  9. How often can an employee adjust their HSA contribution when contributing through a cafeteria plan?
  10. If I lose my job, what happens to my HSA?
  11. How do I overcome employee objections to HSA plans?
  12. What are the key employer responsibilities for an HSA program?

Individual FAQs

Opening an HSA

  1. Who is eligible to open an HSA?
  2. Are there any income limits affecting eligibility?
  3. I have a high deductible insurance policy, do I qualify for an HSA?
  4. My spouse has a health policy through her employer, am I eligible?
  5. I have a qualified high deductible policy, how do I set-up an HSA?
  6. Does my HSA need to be set-up with my Health Insurance Company?
  7. Will my account be protected?
  8. What if I don’t have a high deductible health insurance policy?
  9. If my spouse has a non-HDHP would that prohibit me from getting an HDHP?
  10. I have an HDHP through my employer but my employer does not offer an HSA, can I still have one?
  11. My wife and I have family coverage, can we both open an HSA?
  12. If I lose my job, what happens to my HSA?

Contributions

  1. Who can contribute to my HSA?
  2. How much can I contribute to my HSA?
  3. How is the contribution limit determined?
  4. Can I fund my account at the family level if I have single coverage?
  5. Do I need to fund my entire HSA all at once or can I fund it over time?
  6. How do I make additional contributions after I opened my HSA?
  7. What is a catch-up contribution?
  8. Can both spouses make a catch-up contribution?
  9. My employer only funded a portion of my HSA, can I still contribute to it?
  10. I am age 65 and covered under an HDHP, can I still contribute to my HSA?
  11. What if I am only eligible part of the year?
  12. When do I have to make my contribution?
  13. What if I was but no longer am eligible for an HSA, can I still make a contribution?

Distributions

  1. What can I spend my HSA funds on?
  2. What expenses are qualified?
  3. Can I withdraw the funds from my HSA account at any time?
  4. What can I invest the funds in my HSA account in?
  5. Am I required to track the expenditures made from my HSA?
  6. I have self only insurance coverage, can I use my HSA funds for my family members?
  7. I understand that I can reimburse myself from my HSA for qualified medical expenses that I pay out-of-pocket but is there a time limit, do I need to reimburse myself in the same year?
  8. Can I use my HSA to pay for health insurance premiums?
  9. Can I use my HSA to pay for Long Term Care Insurance?
  10. How do I know I am paying the correct amount on my medical bill and am not being overcharged?
  11. If the account beneficiary has attained age 65, are Medicare Part D premiums qualified medical expenses?

Transfers/Rollovers

  1. I have an MSA can I transfer this account into an HSA and what do I need to do?
  2. Are there any limits on the amount I have to spend or on the amount I can carry over to subsequent years?
  3. Special Rules for individuals age 55 and older-additional contribution amounts?
  4. Can I transfer my IRA into an HSA?

Accessing your HSA funds after age 65

  1. How do I access the funds after I reach age 65?
  2. Can I use my HSA to pay for health insurance premiums, including Medicare, of a spouse or dependent?

Account Administration

  1. How do I sign up for online banking?
  2. Can I add a Falcon National Bank MasterCard™ to my account?
  3. Can I use my Falcon National Bank MasterCard™ at an ATM?
  4. What ATMs can I use?
  5. How do I order more checks?
  6. I can not remember my online banking password, who do I contact?
  7. Can I use telephone banking?
  8. I did not receive a Falcon National Bank MasterCard™ what should I do?
  9. I can not activate my Falcon National Bank MasterCard™ what should I do?
  10. Is this a debit card or a credit card?
  11. How do I order additional cards for other members of my family?
  12. What is the daily Falcon National Bank MasterCard™ limit?
  13. Why did I get a get an ATM card only (no debit card)?

Brokerage FAQs

  1. How do I make a trade?
  2. How do I open and fund my account?
  3. How do I fund my Brokerage Account?
  4. How do I get funds out of my brokerage account?
  5. Is there a fee for transferring funds between my HSA and brokerage accounts?
  6. Is the brokerage account really just a separate HSA?
  7. Is there an annual fee for the brokerage account?
  8. How much do I need to keep in my checking account if I have a brokerage account?
  9. What mutual funds can I buy through the brokerage service?
  10. Is there a fee for closing my Brokerage Account?

IRS Materials

  1. IRS Form 1040 — HSA deduction on Line 25
  2. IRS Form 8889 — HSA Instructions
  3. IRS Final Comparability Regulations — Final Regulations on comparability rules regarding employer contributions on behalf of employees.
  4. IRS Form 5498-SA Contribution Report
  5. IRS Form 1099-SA Distribution Report
  6. Instructions to 1099-SA and 5498-SA
  7. Instructions to IRS Form 8889
  8. IRS Publication 502 Medical and Dental Expenses. — IRS guidelines on qualified medical expenses.
  9. IRS Publication 969 HSAs and Other Tax-Favored Health Plans. — IRS high level overview of health savings accounts.
  10. IRS Notice 2004-2 — early IRS guidance on health savings accounts.
  11. IRS Notice 2004-23 — safe harbor guidelines for preventative care that may be provided by an HDHP without satisfying the minimum deductible requirements.
  12. IRS Notice 2004-50 — additional IRS guidance on health savings accounts.
  13. IRS Notice 2005-8 — IRS guidance on a partnership’s contributions to a partner’s HSA and an S-corporation’s contribution to a 2-percent shareholder employee’s HSA.
  14. IRS Notice 2005-86 — IRS guidelines regarding eligibility for a health savings account during a cafeteria plan grace period.
  15. IRS Notice 2007-22 — IRS Guidance on rollovers of FSA and HRAs to HSAs.
  16. IRS Revenue Ruling 2005-25 — clarification on spousal eligibility for an HSA when other spouse has nonqualifying family coverage.
  17. IRS Revenue Ruling 2004-45 — interaction between HSAs and other health arrangements (FSA as “other health plan”).
  18. IRS Notice 2008-51 — IRA to HSA Direct Transfer Rules.
  19. IRS Notice 2008-52 — Testing Period Rules.
  20. IRS Notice 2008-59 — General HSA Guidance.
  21. IRS Form 5329 — Use this form to pay a penalty tax on excess contributions to an HSA.
  22. IRS Form 5329 Instructions
  23. IRS Notice 2010-59 — Revision to the definition of Medical Expenses as it pertains to Over the Counter medications.
  24. IRS Form W2 — Used by employers to report employer’s HSA contributions
  25. IRS Form W2 Instructions
  26. IRS Form W9

New Health Law's Impact on HSAs

1. How does the new law affect reimbursable expenses?

Effective January 1, 2011 you may no longer use your HSA to purchase over-the-counter medications without a doctor’s prescription. However, if you get a doctor's prescription for over-the-counter drugs then you can still purchase them using your HSA. The rule against buying over-the-counter drugs with you HSA does not apply to non-drug over-the-counter items such as bandages or contact lenses cleaner and you do not need a doctor’s prescription for diabetic supplies.

2. Can I continue to contribute the same amount to my HSA?

The new law does not change the HSA contribution limits. However, new rules on the definition of what is a Qualified Health Plan could change your eligibility to contribute to an HSA in 2014 or later.

3. I heard that FSAs are now limited to $2,500, does that rule apply to HSAs?

No. The new law will limit Flexible Spending Accounts (FSAs) contributions to $2,500 starting in 2013, but that new law does not apply to HSAs.

4. What happens to my HSA balance in the case where I can no longer contribute new money?

You can continue to use any amounts in your HSA for eligible medical expenses or save it for later even if you are no longer eligible to contribute more to your HSA. This is important to know in case you do change plans to a non-HSA eligible plan to comply with the new law. The HSA remains one of the best tax favored options available. One good strategy is to accumulate assets now in the HSA to prepare for whatever happens.

5. Should I change anything based on the new law?

The new law is a foundational change to our health care and insurance system and mostly likely will impact everyone. For now; however, the combination of a High Deductible Health Plan and HSA remain very competitive and a good choice for many businesses and consumers.

Employer FAQs

1. When does the HSA have to be established?

The account does not ever have to be opened. Employers are under no obligation to provide HSAs to their employees. However, for employees to be able to take advantage of the ability to pay for medical expenses using pretax funds, the account must be established before the expense has been incurred.

2. Does an employer have to make contributions to an employee’s HSA?

No, employers are under no obligation to make any contributions to their employee’s HSAs. Many employers find that making a contribution may help improve employee acceptance of adopting an HSA plan especially if they are transitioning from a more traditional type of health coverage. If an employer elects to contribute to an HSA outside of a cafeteria plan, the contributions must be comparable. We have developed a simple worksheet that helps you evaluate comparability: view our Employer Comparability Worksheet.

3. May an employer fully fund the employee’s HSA at the beginning of the year?

Yes. An employer may fully fund the employee’s HSA at the beginning of the year however, HSAs belong to the individual and not the employer and the employer has no further control over the accounts after they have been funded. As a result, many employers elect to fund employees HSAs periodically thoughout the year.

4. Are employer-made HSA contributions deductible health care expenses?

The tax treatment depends on how the business is incorporated. For sole proprietors, partnerships, and S-corporations, contributions to a partner’s HSA will be treated as a distribution to the partner and included in the partner’s income and may be deductible by the partner but not by the business (see IRS Notice 2005-8 for treatment of HSA contributions in exchange for guaranteed payments of services rendered for partners and 2-percent shareholder employees of S-corporations). For larger corporations, employer contributions are treated as employer provided coverage for medical expenses under an accident or health plan.

5. Can employers make pre-tax contributions to their employees’ HSAs?

Yes. Employers may make pre-tax contributions to their employee’s HSAs if they have a cafeteria plan in place that provides for HSA contributions. These contributions are not subject to witholding from wages for income tax or subject to FICA, FUTA or the Railroad Retirement Act.

6. May employers make matching contributions?

In general, employer matching contributions would likely violate comparability testing (i.e., they must make comparable contributions for all eligible individuals with comparable coverage during the same period). However, matching contributions through a section 125 cafeteria plan are not subject to comparability testing (but section 125 nondiscrimination rules would apply).

7. Can you coordinate an HSA with a cafeteria plan?

Yes. Under certain limited circumstances it is possible for employees to fund an HSA in addition to a health FSA. Integration of these plans must be carefully constructed so that the benefits being reimbursed under the health FSA are limited to benefits not paid by the high deductible plan. For example, it would be possible to have an vision and dental FSA, as long as the high deductible plan does not cover vision or dental benefits.

8. Is the employer responsible for reviewing medical expenses?

No, the employer is not responsible for policing the employee’s HSAs. The individual account holder is responsible for determining that their account funds are being properly used and would be required to provide supporting evidence on the use of their funds if requested under IRS audit.

9. How often can an employee adjust their HSA contribution when contributing through a cafeteria plan?

Employees contributing to an HSA through a cafeteria plan may make adjustments to their contributions at any time, as long as the change only affects future contributions.

10. If I lose my job, what happens to my HSA?

Your HSA belongs to you regardless of your employment. If you lose your job and elect to retain your HDHP under COBRA you may even pay the COBRA premiums from your HSA. See our whitepaper for more information.

11. How do I overcome employee objections to HSA plans?

Some employees object to the switch from traditional health insurance to a combination of a High Deductible Health Plan and HSAs. Read our article on Overcoming Employee Objections to HSAs for some tips on how to address this issue.

12. What are the key employer responsibilities for an HSA program?

Read our article on HSA Programs for Groups: Employer Versus Employee Responsibilities for a complete review of the compliance aspects of HSA programs.

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Individual FAQs

Opening an HSA

1. Who is eligible to open an HSA?

Anyone, individuals, employees and employers, can open an HSA but you must have a corresponding high deductible health policy. More technically, an HSA can be established for any individual that meets all of the following:

  • is covered by a high deductible health plan
  • is not covered by another health plan
  • is not eligible to be claimed as a dependent on another person’s tax return
  • is not entitled to Medicare benefits

For more information please see our Eligibility & Contribution Worksheet

2. Are there any income limits affecting eligibility?

No, everyone is eligible.

3. I have a high deductible insurance policy, do I qualify for an HSA?

You may, but in order to qualify for an HSA you must be an eligible individual (see above) and have a qualified high deductible policy (an HDHP). A qualified HDHP is one that has specified minimum limits for the annual deductible and maximum limits for out-of-pocket expenses. Specifically, for individual coverage the HDHP must have an annual deductible of at least $1,250 and require that annual out-of-pocket expenses (includes co-payments and deductibles but not insurance premiums) paid not exceed $5,950. For family coverage the limits are an annual deductible of not less than $2,400 and require that out-of-pocket expenses not exceed $11,900. These are 2014 limits.

4. My spouse has a health policy through her employer, am I eligible?

If your spouse has an individual policy and no other insurance and you are otherwise qualified (see above), you are eligible to have an HSA. However, if your spouse participates in an FSA you would not be eligible for an HSA if your spouse can use the FSA for your general health expenses. This is because you are not eligible for an HSA if you are covered by “other insurance”. Even though you are not covered by your spouse’s health insurance, the IRS has determined that your spouse’s FSA is considered “other insurance” thus rendering you ineligible for an HSA. An exception to this rule exists for limited purpose FSAs (those that cover vision and dental expenses only) and you would be eligible for an HSA if your spouse had a limited purpose FSA.

5. I have a qualified high deductible policy, how do I set-up an HSA?

To open your HSA with HSA Resources simply complete an application.

6. Does my HSA need to be set-up with my Health Insurance Company?

No. The HSA can be set-up with any qualified trustee or custodian. Many people are choosing to open their HSAs with a provider that is different from their insurance company to take advantage of lower fees and establish independence in the event that they change insurance providers.

7. Will my account be protected?

An HSA is a trust or custodial account that can hold many different types of assets; including, both FDIC insured investments and others. If your money in your HSA is placed into an FDIC insured deposit account, an FDIC checking account for instance, then it will enjoy FDIC insurance.

8. What if I don’t have a high deductible health insurance policy?

Before you can open a Health Savings Account with HSA Resources you must first be insured with a High Deductible Health Plan (HDHP).

9. If my spouse has a non-HDHP would that prohibit me from getting an HDHP?

Generally, no. As long as your spouse’s non-HDHP does not cover you, you remain an eligible individual and can participate in an HSA. If your spouse had a family non-HDHP and you were not exempted from that coverage then you would not be an eligible individual and would not be able to participate in an HSA. However, if, for example, your spouse had a family non-HDHP to cover himself and your two children only, then you would still be eligible to open an HSA.

10. I have an HDHP through my employer but my employer does not offer an HSA, can I still have one?

Yes. The HSA belongs to the individual not the employer and any eligible individual may open an HSA. As long as you are covered under a High Deductible Health Plan (HDHP) you may open and contribute to an HSA.

11. My wife and I have family coverage, can we both open an HSA?

Yes. You may both open an HSA however, the total amount that may be contributed to your HSAs is still the contribution limit (see Contribution Limits below).

12. If I lose my job, what happens to my HSA?

Your HSA belongs to you regardless of your employment. If you lose your job and elect to retain your HDHP under COBRA you may even pay the COBRA premiums from your HSA.

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Contributions

1. Who can contribute to my HSA?

Any eligible individual may contribute to an HSA. For an HSA established on behalf of an employee both the employee and the employer may make contributions. Additionally, family members may make contributions on behalf of other family members as long as the other family member is an eligible individual (i.e., has a qualified HDHP and is not otherwise insured).

2. How much can I contribute to my HSA?

The guidelines for contribution maximums are shown below:

  2013 2014
Self-only coverage  $3,250 $3,300
Family coverage   $6,450 $6,550
Catch–up contributions $1,000 $1,000

Contribution guidelines will be adjusted annually to account for CPI fluctuations.

3. How is the contribution limit determined?

Eligible individuals with self-only coverage may contribute up to $3,250 (2013), $3,300 (2014) and those with family coverage may contribute up to $6,450 (2013), $6,550 (2014). Caution: if this is your first year of HSA eligibility the amounts above may be reduced if you fail to meet a testing period. If you are an existing HSA owner, the amounts above may be reduced if you fail to maintain your eligibility for the full tax year.

4. Can I fund my account at the family level if I have single coverage?

No, if you have single coverage you are limited to the individual HSA contribution limit. You may use your HSA funds to pay for the qualified medical expenses of family members (see Distributions, question 6) however, the amount you may contribute to your HSA is limited by the level of your insurance coverage.

5. Do I need to fund my entire HSA all at once or can I fund it over time?

You can fund your account over time or all at once. Also, one of the large benefits for employees is that contributions are tax free; individuals’ contributions are made on a pre-tax basis, employer contributions are deductible as employer provided coverage for medical expenses and contributions on behalf of another family member are deductible (regardless of whether the person contributing itemizes their taxes).

6. How do I make additional contributions after I opened my HSA?

A simple method to do this is to simply write a check to HSA Resources and send it to HSA Resources, 1010 West St. Germain Street, Suite 150, St. Cloud, MN 56301 along with a HSA Contribution form. This form tells us the tax year of the contribution (remember, between January 1 and April 15, you can make a current or prior tax year contribution). We also need to know the type of your contribution (regular or rollover) and we need your account number. If you prefer, you can write these three pieces of information on the check or separate letter instead of using the HSA Contribution form. If you want to make the contribution electronically via ACH either as a one-time or monthly contribution the HSA Contribution form will help you do that as well.

7. What is a catch-up contribution?

Eligible individuals who are over age 55 but under age 65 are allowed to make additional “catch-up” contributions to their HSAs. The catch-up contribution for 2011 is $1,000.

8. Can both spouses make a catch-up contribution?

Yes; however, the catch-up amount cannot be combined and put into one HSA: each spouse must open an HSA and put the catch-up amount into his/her own respective HSA.

9. My employer only funded a portion of my HSA, can I still contribute to it?

Yes. You may fully fund your HSA up to the contribution limit (please see our Eligibility & Contribution Worksheet.)

10. I am age 65 and covered under an HDHP, can I still contribute to my HSA?

As long as you have not enrolled in Medicare Part A or B you are an eligible individual and may contribute to your HSA. Once you enroll in Medicare you may no longer contribute to your HSA. For most individuals this means you will no longer be eligible when you turn 65. You lose eligibility as of the first day of the month you turn 65. For example, if you turn 65 on July 21, you are no longer eligible for an HSA as of July 1. Your maximum contribution for that year would be 6/12 (you were eligible the first six months of the year) times the applicable federal limit (remember to include the catch-up amount in the federal limit).

11. What if I am only eligible part of the year?

If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if between ages 55–65, so long as you start your HDHP coverage no later than December 1 of that year. In this case; however, you will be subject to a testing period. The testing period requires that you maintain HSA eligibility for a period beginning on December 1 of the year you started and ending on December 31 of the next year. See our HSA Testing Period Worksheet for details.

If this is not your first year of the HSA and you stop your HSA eligibility mid-year, you are only allowed to contribute 1/12 of the applicable federal limit times the number of months you were eligible. please see our Eligibility & Contribution Worksheet.

12. When do I have to make my contribution?

You can make your HSA contribution until your tax filing due date (April 15 of the year following the tax year for most people).

13. What if I was, but no longer am eligible for an HSA, can I still make a contribution?

You can make an HSA contribution even if you are no longer eligible if you are making it for a period when you were eligible. For example, assume you were eligible all of 2010 but you never opened or funded an HSA. Starting in 2011, you are no longer eligible. You can still make an HSA contribution in 2011 for 2010 (because you were eligible in 2010). Be careful as to how much you can contribute in a situation like this — (please see our Eligibility & Contribution Worksheet.)

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Distributions

1. What can I spend my HSA funds on?

In general you can use your HSA funds to pay for any qualified medical expense. Qualified medical expenses are a defined term created by the IRS and include: medical care, prescription drugs, and payment for long term care. View a more detailed list of qualified expenses.

Note: the qualified expenses must be incurred after the HSA has been established.

2. What expenses are qualified?

Expenses paid by the account beneficiary for medical care are covered. These expenses include:

  • acupuncture
  • ambulance costs
  • artificial limbs
  • artificial teeth
  • bandages
  • birth control pills
  • contact lenses
  • crutches
  • doctor visits
  • some dental expenses
  • vision care (eyeglasses, contacts, Lasik surgery)
  • hearing aids
  • lab fees
  • prescriptions
  • X-rays
  • …and many more.

View a more detailed list of qualified expenses. Generally, health insurance premiums are not qualified medical expenses however, in certain circumstances they can be qualified (e.g., certain amounts of Long Term Care Insurance or Medicare part A or part B for qualified individuals).

3. Can I withdraw the funds from my HSA account at any time?

Yes, however, if the funds are withdrawn for any expense other than a qualified medical expense, the IRS will impose a 20% penalty tax. After you reach age 65 you can withdraw the funds without penalty but the amounts withdrawn will be taxable as ordinary income.

4. What can I invest the funds in my HSA account in?

You can invest the funds in bank accounts, money markets, mutual funds and stocks. You may not invest in collectibles, art, automobiles or real estate. As the initial funds in your HSA may need to be used to for medical expenses we recommend you maintain a small balance in your checking account and consider more liquid investments until you have a good estimate of your needs.

5. Am I required to track the expenditures made from my HSA?

Yes, the individual who establishes the HSA is required to maintain a record of the expenses sufficient to demonstrate that the distributions were for qualified medical expenses.

6. I have self only insurance coverage, can I use my HSA funds for my family members?

Yes, you may use your HSA to pay for the qualified medical expenses of any of your dependents so long as their expense is not otherwise reimbursed, see our Distribution Worksheet for more details.

7. I understand that I can reimburse myself from my HSA for qualified medical expenses that I pay out-of-pocket but is there a time limit? Do I need to reimburse myself in the same year?

You have your entire lifetime to reimburse yourself. As long as you had your HSA established at the time the expense was incurred, you save the receipt and it was not otherwise reimbursed, you can reimburse yourself for the expense from your HSA even years later.

8. Can I use my HSA to pay for health insurance premiums?

Generally, you cannot treat insurance premiums as qualified medical expenses unless the premiums are for:

  1. Long-term care insurance. (subject to IRS mandated limits based on age and adjusted annually, see IRS Publication 502: Long-Term Care).
  2. Health care continuation coverage (such as coverage under COBRA – see IRS Publication 502: COBRA Premium Assistance).
  3. Health care coverage while receiving unemployment compensation under federal or state law.
  4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).

Note also that items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses.

9. Can I use my HSA to pay for Long Term Care Insurance?

Yes, HSA distributions used to pay for Long Term Care Insurance premiums qualify as a tax-free, penalty-free distribution; however, the amount is limited. The amount allowed is based on age and adjusted for inflation each year. See Revenue Code 213(d)(10).

10. How do I know I am paying the correct amount on my medical bill and am not being overcharged?

One of the benefits and responsibilities of having an HSA is choosing your medical treatments and paying directly with your HSA. Knowing you are paying a fair price is more challenging than it should be because of the complexity of medical bills. For large or complex bills we recommend a bill review and negotiation service provided by INSNET. INSNET understands the billing process and pricing. They will review your bill for errors and negotiate a discount for you. Learn more about INSNET or read how it works.

If the account beneficiary has attained age 65, are Medicare Part D premiums qualified medical expenses?

Yes. If an account beneficiary has attained age 65, premiums for Medicare Part D for the account beneficiary, the account beneficiary's spouse, or the account beneficiary's dependents are qualified medical expenses. See also Notice 2004-2 [DOC], Q&A-27, and Notice 2004-50, Q&A-4 and Q&A-45, regarding Medicare Parts A and B.

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Transfers/Rollovers

1. I have an MSA can I transfer this account into an HSA and what do I need to do?

Yes, an MSA can be rolled over into an HSA. The process is very simple and straightforward. Simply complete an MSA Rollover Application and submit it to HSA Resources.

2. Are there any limits on the amount I have to spend or on the amount I can carry over to subsequent years?

No, there are no limits and the entire balance can be carried over from year to year.

3. Special rules for age 55 and older-Additional contribution amounts?

For individuals age 55 to 65 the HSA contribution limit has been increased by $1,000 for contribution year 2011.

4. Can I transfer my IRA into an HSA?

Yes, the law allows a one-time transfer of IRA assets to fund an HSA. The amount transferred may not exceed the amount of one year’s contribution and individuals must be otherwise eligible to open an HSA. Transfers are not taxable as IRA distributions however; amounts transferred into an HSA from an IRA are not deductible. See our IRA to HSA Worksheet for details.

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Accessing your HSA funds after age 65

1. How do I access the funds after I reach age 65?

Once you reach age 65 your funds can be withdrawn at any time and are only subject to ordinary income tax. However, you may avoid any tax by continuing to use the funds for qualified medical expenses. For those over age 65 premiums for Medicare Part A or B, Medicare HMO and employee premiums for employer sponsored health insurance can be paid from an HSA.

2. Can I use my HSA to pay for health insurance premiums, including Medicare, of a spouse or dependent?

You can use your HSA to pay for health insurance premiums of your spouse or dependents in the case when your spouse or your dependent are: (1) receiving health care continuation coverage through COBRA, or (2) are receiving unemployment compensation through a federal or state program. If you are not age 65, you generally cannot use your HSA to pay for the Medicare premiums of your spouse who is over 65.

Account Administration

1. How do I sign up for online banking?

  1. Go to Falcon National Bank, sign in, and agree to the disclosure
  2. Agree to the disclosure
  3. Verify your information and Continue
  4. Complete the personal information and click Submit.
  5. Select Send Email Verification
  6. You will receive an email from Falcon National Bank. Within 1 hour of receiving the email click on the link from the same computer you enrolled with, then set up your Online Banking ID, Password, and security questions.

2. Can I add a Falcon National Bank MasterCard™ to my account?

If you do not already have a Falcon National Bank MasterCard™ you may add one by completing Section 1 of our Account Application. Please be sure to check the Debit Card box in the right hand corner and note on the form that you are an existing customer requesting a Falcon National Bank MasterCard™. Fax the completed form back to us at (320) 223-6310.

If you would like to add a Falcon National Bank MasterCard™ for another individual on your account, just complete Section 5 of our Account Application. Please be sure to include the name and account number of the existing account holder at the top of the page. Additional cards are $15 per card issued.

3. Can I use my Falcon National Bank MasterCard™ at an ATM?

Yes; however, in order to be eligible for tax-free treatment you must use the funds received for an eligible medical expense or use the cash to reimburse yourself for previously made medical expenses.

Money Pass

4. What ATMs can I use?

You can use any Money Pass® ATM. Some ATMs charge a surcharge and others do not. Find a Money Pass® ATM that does not charge a surcharge.

5. How do I order more checks?

To order an additional box of checks all you need to do is to our customer service department. Please be sure to include your name, account number and number of boxes of checks. Each box is $8 and contains 40 checks.

6. I can not remember my online banking password, who do I contact?

To reset your please contact a customer service representative at (866) 757-4727 x1 who will be happy to reset your password. Once you are signed in to online banking, you can sign up for self-reset to change your password on your own in the future (look for the “options” tab and then “password reset question”).

7. Can I use telephone banking?

Yes. Get the details on telephone banking. To access telephone banking call 866.757.4727, extension 5.

8. I did not receive a Falcon National Bank MasterCard™ — what should I do?

If you did not check the box for a debit card on your application one would not have been ordered. Please call us at (866) 757-4727 x1 to get a card ordered for you.

9. I can not activate my Falcon National Bank MasterCard™ — what should I do?

For security purposes, your card must be activated from the number that you provided on your application, please confirm that you are calling from the number you provided. If you are still having difficulties contact a customer service representative. Note: your card may still be used to purchase items without being activated however, you will not be able to make cash withdrawals until it has been activated.

10. Is this a debit card or a credit card?

Debit card. This card is attached to a deposit checking account and not to a credit account and may be used anywhere MasterCard is accepted. You may also make cash withdrawals from cash machines using your Falcon National Bank MasterCard™, the maximum withdrawal is $200/day.

11. How do I order additional cards for other members of my family?

Please contact a customer representative at (866) 757-4727 x1. the cost is $15 per additional card issued.

12. What is the daily card limit?

There is an automatic limit of $500 per day placed on Falcon National Bank MasterCard™ transactions. If you would like to use your card for a transaction that will exceed that amount please contact customer representative at (866) 757-4727 x1 and they will modify your limit.

13. Why did I get a get an ATM card only (no debit card)?

Banking law prevents us from opening a full HSA for customers that do not pass a review on ChexSystems®. In these situations, we will open an HSA savings account and typically provide an ATM card. The ATM card provides a method to pay or reimburse for eligible medical expenses. Alternatively, customers can provide a completed Distribution Form and will send a check. We can generally covert these savings accounts into full HSA checking accounts after a period of six months or one year.

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Brokerage FAQs

1. How do I make a trade?

You execute trades yourself, online. After your account has been established you will be able to access our brokerage services by logging onto a separate online brokerage account. Click here to find the contact person for questions.

2. How do I open and fund my account?

Open it by clicking here. The only way to move money into your brokerage account is to electronically direct (ACH) the money into your brokerage account from your HSA checking account. You initiate the transfer of funds by logging into your brokerage account and following the steps to transfer money from your checking account. You are not allowed to make contributions directly into your brokerage account.

3. How do I fund my Brokerage Account?

The only way to move money into your Brokerage Account is to electronically direct (ACH) the money into your brokerage account from your HSA Resources checking account. You are not allowed to make contributions directly into your Brokerage Account.

4. How do I get funds out of my brokerage account?

The only method of gaining access to the funds in your brokerage account is to transfer the funds back into your HSA checking account. Your checks and debit card will not work directly from your brokerage account and draw only from your HSA checking account. You can only use your HSA checking account to pay for eligible medical expenses and you need to move money as necessary from brokerage to cover expenses.

5. Is there a fee for transferring funds between my HSA and brokerage accounts?

No, there is no cost to move funds between accounts and you use the ACH tools provided in your brokerage account website to move funds.

6. Is the brokerage account really just a separate HSA?

No, although your brokerage account is separate in some notable ways; separate online access, viewing of balance information, and separate periodic statements, it is still all part of the same HSA Custodial Agreement. This means that Falcon National Bank is your HSA custodian for both your brokerage account and your checking account. You only have one HSA for the purpose of required reporting to the Internal Revenue Service (IRS). You have one HSA with two sub-accounts for investment purposes: your brokerage account and your checking account. Your brokerage account and checking account will also be linked together to provide easy movement of money from one account to the other.

7. Is there an annual fee for the brokerage account?

Yes, there is an additional $15 annual custodial fee for the brokerage account. You must have an HSA checking account in order to have brokerage and maintain a minimum balance in your checking account. The brokerage custodial fee is deducted from your checking account annually on March 1st. The checking custodial fee is deducted from your account on the anniversary date of your HSA. Please leave enough in your checking account balance to cover the annual custodial fees or you could face maintenance charges for failure to maintain a minimum balance.

8. How much do I need to keep in my checking account if I have a brokerage account?

You must maintain $1,000 in your HSA checking account. Additionally, we deduct all custodial and other account related fees from your HSA checking account plus all of your transactions (check or Falcon National Bank MasterCard;) will be drawn from your HSA checking account. Therefore, we recommend you leave enough in your checking to cover these all fees. New accounts are free for the first year and free thereafter if the monthly balance exceeds $2,500 ($2.25/month otherwise). Brokerage trading fees are deducted from your brokerage balance, not your checking balance. Please be aware that your account will be assessed a $10 fee if your balance falls below $1,000 in your HSA Checking Account on any day during the month.

9. What mutual funds can I buy through the brokerage service?

You can buy virtually all no-load publicly traded funds.

10. Is there a fee for closing my Brokerage Account?

No, there is no fee for closing your brokerage account. You need to first sell any open positions and transfer the cash back into your HSA checking account.

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