Health Savings Account Frequently Asked Questions

Associated Bank has the answers to your questions about HSA rules and guidelines. The following health savings account FAQ can be used as an informative handbook. However, if you have other questions, please give us a call.

The HSA consists of two parts: your individual HSA and a high-deductible health plan (HDHP).

The HDHP is like a traditional health plan, but it has higher deductibles. Federal law says you can open an HSA only if you are enrolled in an HDHP and are not enrolled in other forms of low-deductible health insurance.

The HSA is an individual, tax-advantaged account that you establish with Associated Bank. You and your employer may contribute money to this account, for use in paying medical expenses not covered by the HDHP.

The information in these FAQs is only a summary. Your HDHP is governed by the terms and conditions set forth in the certificate of coverage or plan document issued by your benefits administrator. Your HSA is governed by the terms of your custodial agreement and the rules issued by Associated Bank. If a conflict exists between any plan documents, contracts, rules, regulations or laws and the information in these FAQs, the applicable plan document, contract, rule, regulation or law applies.

1. Setting Up an HSA

2. Contributing To Your HSA

3A. Your HSA Account – Account Questions

3B. Your HSA - Associated's Health Savings Investment Account

4. Using Your HSA Funds

5. Tax Reporting

6. Miscellaneous

1. Setting Up an HSA

1.1 Who can set up an HSA?

To be eligible for a Health Savings Account, you must:

  • be covered by a qualified High Deductible Health Plan (HDHP).
  • not be covered by another form of "low deductible" insurance (such as through your spouse’s employer). (See Q1.4 " Can I be covered by another health plan? " for further information).
  • not be claimed as a dependent on someone else’s tax return.
  • not be covered by Medicare (Part A, Part B or Part D).

While company owners can sign up for an HSA, certain owners may not be able to contribute to the HSA on a pretax basis. Please contact your benefits administrator if you have questions about HSA eligibility.

1.2 When can I set up an HSA?

You can set up an HSA when you enroll in your employer’s High Deductible Health Plan, or after you become covered by an HDHP. Your HR/benefits department will direct you on how to establish the HSA.

1.3 What is a qualified high-deductible health plan?

A qualified High Deductible Health Plan (HDHP) is a health plan that:

  • Provides coverage for medical expenses.
  • Has a minimum annual deductible that meets the IRS-stated amounts, which are indexed for inflation and may increase each year. For 2013, and 2014, a minimum of $1,250 for single coverage and $2,500 for family coverage applies.
  • Does not pay any medical expenses, including co-pays, office visits or co-insurance, until the applicable deductible is satisfied, other than for preventative care.
  • Has maximum out-of-pocket expenses that do not exceed the IRS-specified amounts, which are indexed for inflation and will increase each year. For 2013, a maximum of $6,250 for single coverage and $12,500 for family coverage, except for out-of-network claims applies. For 2014, a maximum of $6,350 for single coverage and $12,700 for family coverage, except for out-of-network claims applies.

1.4 Can I be covered under another health plan and still set up an HSA?

If you are covered by another health plan (e.g., through your spouse’s employer), that health plan must meet all of the criteria for a qualified High Deductible Health Plan. If you are enrolled in a health plan that does not meet the criteria for a High Deductible Health Plan, you may not set up an HSA and you must stop contributing to any HSA you do have. You may be covered by the following types of plans without losing the right to set up an HSA:

  • Dental
  • Vision
  • Short- and long-term disability
  • Life and accident
  • Long-term care
  • Certain Health Flexible Spending Arrangements (also called Section 125 or Pretax Medical Reimbursement Accounts)
    • Insurance for specific types of diseases or illnesses, e.g. cancer plans
    • Hospital indemnity plans
    • Limited-purpose FSA (dental and vision only)
    • Post-deductible HRAs

For you to participate in a Health Flexible Spending Arrangement and an HSA at the same time, the Health Flexible Spending Arrangement, whether provided by your or your spouse’s employer, must typically be limited to reimbursing dental expenses, vision care expenses and/or medical expenses that exceed your HDHP deductible. Check with your or your spouse’s benefits administrator to determine if you can participate in any Health Flexible Spending Arrangement offered by your or your spouse’s employer.

If you are enrolled in Medicare or Medicaid, you are not eligible to contribute to an HSA. If you have coverage under Tricare (military insurance), you are not eligible for an HSA. On the other hand, being eligible to receive V.A. benefits will not make you ineligible to open an HSA—but actually receiving V.A. benefits (including prescription drugs) makes you ineligible to contribute to your HSA for up to three months. Please check with your V.A. benefits caseworker for confirmation when receiving such benefits.

1.5 Can I set up an HSA if my spouse and/or dependents are covered under another health plan?

Yes, as long as you, the HSA account owner, are covered by a qualified HDHP and are not covered by any other form of low deductible insurance, your spouse and your dependents may still be able to participate in other health insurance (e.g., through your spouse’s employer’s insurance plan), without affecting your HSA eligibility. You may also use your HSA funds to pay for the qualified medical expenses of your spouse and dependents – even if they are covered under another health plan.

2. Contributing to Your HSA

2.1 How do I put money into my HSA?

After enrolling in the HSA, you work with your HR/benefits department to choose how much money you will contribute to your HSA. Your employer may then deduct that amount from your paycheck on a pretax basis, and forward the money to Associated Bank to be deposited into your HSA. Contributions can also be made through online transfers with Associated’s Online Banking, direct deposit from another financial account, mobile banking or at one of our branches. Please see the Summary Plan Description and/or Plan Documents for your employer’s pretax plan for more information on pretax contributions, including information on changing your contribution amount.

Your employer may also contribute money to the HSA. These contributions are not taxable as federal earned income, but any HSA contributions may be subject to state income tax. Please consult your tax advisor to determine the potential tax advantages of your HSA.

If you are setting up an individual HSA, Associated Bank will help you determine a contribution schedule with simple options for making contributions on a regular basis.

2.2 How much money can I put into my HSA?

General Contribution Limit

The maximum contribution in 2013 is $3,250 for single coverage, and $6,450 for family coverage. The maximum contribution in 2014 is $3,300 for single coverage and $6,550 for family coverage. The total amount contributed by you and your employer cannot exceed this maximum. If your spouse has his or her own HSA, the following special rules apply:

  • You and your spouse each have single high-deductible health plan coverage. You may each contribute up to the maximum for single coverage to your respective HSAs.
  • Either you or your spouse has single high-deductible health plan coverage and the other person has family HDHP coverage. You and your spouse may contribute no more than the maximum family coverage limit, divided between your and your spouse’s HSA as you agree.
  • You and your spouse both have family high-deductible health plan coverage. You and your spouse may contribute no more than the maximum family coverage limit, divided between your and your spouse’s HSA as you agree.

Full Contribution Rule

If your HDHP coverage starts mid-year, you may make the full HSA contribution (single or family, whichever applies) for that entire year – provided:

  • You are HSA eligible on December 1 of that tax year; and
  • You remain HSA eligible through the entire next calendar year (January through December).

If you do not remain HSA eligible through the entire next calendar year (other than due to death or disability), you must work with your tax advisor to report any excess contributions made in both the
current and prior tax years.

Catch-up Contribution Limit

The catch-up contribution limit is $1,000. If you are at least age 55 by the end of the calendar year and not covered by Medicare, you may make an additional catch-up contribution to your HSA. Similarly, if your spouse is at least age 55 by the end of the calendar year and meets the HSA eligibility requirements, he or she may also make a catch-up contribution to his or her own HSA. Your spouse must have an individual HSA to make a catch-up contribution; you may not make a catch-up contribution on behalf of your spouse to your HSA.

2.3 What happens if I put too much money into my HSA?

You are responsible for making sure you do not exceed the maximum HSA contribution limit. If, at the end of the year, you have contributed too much to the account, you must report the excess amount to the IRS on your federal income tax return and pay income taxes on that amount. You will also have to pay excise taxes on the excess amount, unless you withdraw the excess and any earnings attributable to that excess before that year’s IRS deadline. (Obtain a withdrawal form if you find yourself in this situation.) Please contact your financial advisor or tax preparer for more information on the taxation of excess HSA contributions.

3A. Your HSA – Account Questions

3A.1 Will my HSA deposit account earn interest?

Yes, you will earn interest on your HSA balance. Rates are variable and may be changed at Associated Bank’s discretion; you will be informed of your current interest rate when you open your HSA. After that, you can check rates by contacting Associated Bank.

3A.2 Will I receive a bank statement for my HSA?

Yes, Associated Bank will send you a monthly statement of deposits and withdrawals whenever there is activity in the account for that month. You may choose to enroll in paperless e-statements through Associated Bank’s Online Banking access. If you have chosen to participate in Associated Bank’s Health Savings Investment Account, you will also receive quarterly statements for those mutual fund assets.

Please note that it is possible to overdraw your account; you are responsible for making sure funds are available before you make withdrawals. Overdraft/NSF fees may be assessed. Please see the Consumer Deposit Account Fee Schedule for current fees.

3A.3 Where can I access my account information?

To view your current balance or account activity, sign in to Associated Bank’s Online Banking, access Mobile Banking or call 800-992-2651.

3A.4 Who should I contact for more information on my debit card or if I lose my debit card?

Call Associated Bank at 800-992-2651.

3A.5 What happens to any money left in my HSA at the end of the year?

Any unused money simply remains in your HSA to pay for future qualified medical expenses and may earn interest.

3B. Your HSA - Associated's Health Savings Investment Account

3B.1 What is a Health Savings Investment Account?*

If you accumulate more than $500 and don’t intend to use it immediately, Associated offers a self-directed option to invest your money in mutual funds with various life-stage offerings with Associated Bank as custodian. Under arrangements between Associated Bank and the fund companies, you will not incur any front-end or back-end sales charges. Account management is also available online, 24 hours a day, seven days a week. Review the Funds List to learn more.

*Investors should read the prospectus carefully and consider the fund’s investment objectives and risks before investing. Links to prospectuses are available at hsa.associatedbank.com or by contacting the fund directly. Mutual fund performance data and ratings represent past performance and are not a guarantee of future results. Funds in the Health Savings Investment Account are NOT deposits or obligations of, insured or guaranteed by Associated Banc-Corp or any other bank or affiliate, are NOT insured by the FDIC or any agency of the United States, and involve INVESTMENT RISK, including POSSIBLE LOSS OF VALUE. Contract administration services are provided by Associated Trust Company, N.A. to Associated Bank, N.A., for which an HSA Investment Account is charged $7.50 per quarter. Associated Trust Company, N.A. is an affiliate of Associated Banc-Corp.( Funds List ).

3B.2 Is there a charge to open a Health Savings Investment Account?

There is no fee to open a Health Savings Investment Account as part of your Associated Bank HSA. You will be assessed a $7.50 quarterly fee, which will automatically be deducted from your Investment Account.

3B.3 How do I open an investment account?

You can access all the forms for the Health Savings Investment Account online at hsa.associatedbank.com. The completed Health Savings Investment Account – Initial Enrollment Form is needed to open a Health Savings Investment Account and make the initial deposit. Return the completed form to the Health Savings Investment Support Area, using the contact information on the form. Your account will be established, and a Personal Identification Number (PIN) will be mailed to you. After you have the PIN, you can change your investment elections online. You can also contact Customer Care at 800-992-2651 to have the form mailed to you.

3B.4 How do I move additional funds to/from my investment account?

You may transfer funds back and forth between the HSA and Health Savings Investment Account by using the Health Savings Investment Account – Transfer Form. Return the completed form to the Health Savings Investment Support Area, using the contact information on the form. All contributions and distributions must be made directly to/from the HSA. Funds may be invested only by transferring funds to the investment account. To access your funds, you must first transfer funds from the investment account to the HSA. Allow up to three business days from the time the bank receives the request for completion.

4. Using Your HSA Funds

4.1 What can I use my HSA money for?

You can use the funds in your HSA to pay for qualified medical expenses, as defined by the IRS, incurred by you, your spouse and your dependents. Generally, medical care expenses include amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Expenses solely for cosmetic reasons generally are not expenses for medical care. Also, expenses that are merely beneficial to one’s general health (for example, vacations) are not expenses for medical care. See your enrollment folder for more information on examples of qualified medical expenses or click here for examples of qualified medical expenses.

4.2 Who determines if an expense is a qualified HSA medical expense?

Because the IRS considers HSAs to be “individual accounts,” you, the account owner, are the one who must determine if a particular medical expense is a qualified medical expense that can be reimbursed from your HSA. While you can contact your benefits administrator or your tax advisor for assistance, it is ultimately your responsibility to determine whether a particular expense qualifies. In the event of an IRS audit, you will be required to present proof (generally in form of receipts) that HSA funds were used to pay for qualified medical expenses. For additional information, please visit www.irs.gov.

4.3 What if I use my HSA money to pay for something that is not a qualified medical expense?

If you are under age 65 and use your HSA funds to pay for a non-qualified medical expense, you will pay income taxes and a 20 percent excise tax on that amount. If you are over 65, or become disabled at any age, and use your HSA funds to pay for a non-qualified medical expense, you will pay ordinary taxes (but not excise tax) on that amount. It is your responsibility to pay the taxes and/or penalties on HSA withdrawals used for non-qualified medical expenses and report them on your tax return. Failure to do so may result in additional penalties.

4.4 How do I get money out of my HSA to pay for qualified medical expenses?

When you have a qualified medical expense, you can use your HSA debit card to pay the merchant, pharmacy, doctor or other medical care provider directly. Additional options for reimbursement include making an ATM withdrawal, making a withdrawal at any Associated Bank branch, using Associated’s online banking or mobile banking service to pay a medical expense or transfer funds. To receive reimbursement through direct deposit to your account, or to have a check mailed to you, access the online Health Savings Account Qualified Medical Expense Reimbursement Form. You can print, complete and return the form to the bank.

It is best if you do not use your HSA debit card, or make any other form of payment, when you initially visit your health care provider. Please wait for your medical claims to be processed so all appropriate discounts are applied. However, you can pay for pharmacy services at the initial point of purchase, after any plan discounts have been applied.

Be sure to keep all receipts for qualified medical expenses you pay using your HSA. If you are ever audited by the IRS, you will be required to prove you used your HSA funds to pay for qualified medical expenses.

5. Tax Reporting

5.1 Will I have to pay taxes on my HSA?

You will not pay federal income taxes on the contributions and interest you earn in your HSA, unless you are no longer HSA eligible. (See “What happens to my HSA if I withdraw from my HDHP?”) You will also not pay federal income taxes on money you withdraw from your HSA, as long as you use the money to pay for qualified medical expenses. (See “What can I use my HSA funds for?”) State income taxes may apply; please discuss with your tax advisor.

Important: If your HSA contributions are made through pretax payroll deductions, you may not claim the contributions as a deduction on your tax return. Similarly, if you itemize deductions on your tax return, you may not claim a deduction for those medical expenses that are reimbursed from your HSA.

5.2 What tax forms will I need for filing?

Associated Bank will provide the following tax documents if you have reportable activity:

  • The Fair Market Value Statement is provided in January each year. This document shows the balance at the beginning of the tax year, all amounts credited, all amounts debited and the end-of-year balance. This document is a summary of the account activity for the tax year and is not intended to be used for tax filing.
  • Form 1099-SA is provided in January each tax year. This document shows the amounts reported as distributions to the IRS. A separate 1099-SA is provided for each type of IRS distribution code.
  • Form 5498-SA is provided in late April/early May each tax year. This document shows the amounts reported as contributions to the IRS. This amount reflects all contributions to the HSA and does not differentiate if the contribution was made pre- or post-tax.
Your employer will provide a W-2 Form listing all employer and employee pre-tax contributions in Box 12 with code W. Please contact your tax advisor for more information on filing your taxes.

6. Miscellaneous

6.1 What should I do if I change my address?

Notify your employer of your address change and contact us with your new address via email, or call 800-992-2651, or mail the address change to:
Associated Bank, N.A.
HSA Department-MS# 7009
P.O. Box 19097
Green Bay, WI 54307-9097

6.2 What should I do if my legal name changes?

Request a new application from your employer or local banking office and mail a copy of the legal document reflecting the name change (e.g., marriage certificate or divorce decree) with the completed forms to: Associated Bank, N.A., HSA Department - MS# 7009, P.O. Box 19097, Green Bay, WI 54307-9097.

6.3 What happens if I leave my employer?

When you terminate employment, you lose eligibility to participate in your employer’s health plan as an active employee and may be eligible to elect COBRA continuation. However, your HSA belongs to you and is yours to take with you—even if you don’t elect COBRA continuation coverage. To remain eligible to contribute to your HSA, you must continue HDHP coverage through your former employer via COBRA, through a new employer’s qualified HDHP, or through an individual HDHP.

6.3 What happens to my HSA if I withdraw from my HDHP?

Withdrawing from your HDHP means you can no longer contribute to your HSA until you are covered by another HDHP.

When you withdraw from your HDHP, you have a few choices:

  • You can leave the money in the account with Associated Bank. You may continue to use the remaining money in your HSA to pay for qualified medical expenses without paying income taxes on the amount withdrawn. If you withdraw money from the account for non-qualified medical expenses, you must pay ordinary and excise taxes on those amounts. (See “What if I use my HSA funds to pay for a non-qualified medical expense?”)
  • You can close the HSA, but you will be required to pay ordinary and excise taxes, if applicable, on the amount used for non-qualified medical expenses. (See “What if I use my HSA funds to pay for a non-qualified medical expense?”)
  • If you close the account, you have 60 days to roll the funds into another HSA.
The interest and investment returns you earn after the date you withdraw from the HDHP continue to accumulate free from federal income taxes. However, you will not be allowed to contribute additional funds to the HSA.

6.4 Will my family receive my HSA funds in the event of my death?

You can designate a beneficiary on your HSA when you set up your account. If you choose not to name a beneficiary, your estate will be named. You can change HSA beneficiaries at any time by requesting an HSA Designation of Death Beneficiary form.

If your HSA beneficiary is your spouse, your HSA may be converted to an HSA in your spouse’s name at your death. He or she will not have to pay any taxes and can use the money in your HSA in accordance with the normal HSA rules. If your HSA beneficiary is not your spouse, the HSA will terminate and the beneficiary will have to pay taxes on the amount in your HSA. If you do not designate a beneficiary, your HSA will terminate and be paid to your estate.

6.5 Where can I go to get more information or help with my HSA?

Contact your HR/benefits department or your insurance administrator with questions about your High Deductible Health Plan. Visit hsa.associatedbank.com or call 800-992-2651 if you have questions about your Health Savings Account.

Links to documents on this page require Adobe Acrobat Reader to view and print.

Investors should read the prospectus carefully and consider the fund's investment objectives and risks before investing. Links to prospectuses are available above or by contacting the fund directly. Mutual fund performance data and ratings represent past performance and are not a guarantee of future results. Funds in the Health Savings Investment Account are NOT deposits or obligations of, insured or guaranteed by Associated Banc-Corp or any other bank or affiliate, are NOT insured by the FDIC or any agency of the United States, and involve INVESTMENT RISK, including POSSIBLE LOSS OF VALUE. Contract administration services are provided by Associated Trust Company, N.A. to Associated Bank, N.A., for which an HSA Investment Account is charged $7.50 per quarter. Associated Trust Company, N.A. is an affiliate of Associated Banc-Corp.

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