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The health-smart savings strategy

Take control of your healthcare expenses with a health savings account (HSA).

Healthcare is expensive. Manage your costs strategically with a tax-advantaged health savings account (HSA). An HSA triples your tax benefits: tax-deductible contributions, tax-free growth and non-taxable withdrawals for qualified expenses. Combined with a high-deductible health plan (HDHP), an HSA can help pay for everything from routine visits and lab tests to surgery for you, your spouse and eligible dependents. You can also use it for vision or dental care and even long-term care insurance premiums and services. And once you open an account, you have it for life – even if you leave the workforce.

  • Reduces out-of-pocket high-deductible health plan costs
  • Earns better interest than standard savings with zero tax burden
  • Allows tax-free contributions by you, your employer or a third party
  • $3 monthly fee waived with online statements or $5,000 balance
  • No minimum opening deposit or balance requirements
  • Free debit MasterCard® with fraud text alerts
  • Lifetime account with no spending deadlines, FDIC-insured

Eligible Expenses

Medical expenses are the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body, including payments for:

  • Legal medical services rendered by physicians, surgeons, dentists and other medical practitioners
  • Costs of equipment, supplies and diagnostic devices needed for these purposes

Medical care expenses must be directly related to alleviating or preventing a physical or mental defect or illness. Important reminders about qualified medical expenses:

  • Items merely beneficial to general good health, such as vitamins or dietary supplements, do not qualify.
  • Only legally purchased drugs qualify as a medical expense.
  • Save receipts for over-the-counter and prescription medications for tax purposes.
  • Some doctor-recommended treatments may be considered ineligible, such as a vacation.

Note: As the HSA owner, you are ultimately responsible for determining whether a health care expense is eligible for reimbursement and must pay income tax and a 20 percent penalty on any amount applied to a non-qualified medical expense. Penalty tax does not apply to payments made after your death or disability or after age 65. HSAs cannot be used to pay for medical expenses incurred before the account was established.

Your IRA Questions, Answered.

Visit and check Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans or Publication 502 – Medical and Dental Expenses. As long as you have HDHP coverage, both your HSA and catch-up contributions will be pro-rated based on the number of months of any given calendar year that you are eligible.

Maximize your contributions to receive the maximum tax deduction. Any eligible individual can contribute. For an employee’s HSA, the employee, employer or both may contribute in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual.

You can keep track of your HSA funds via:

  • Monthly statements mailed and/or emailed to you
  • Online account information at
  • F&M Bank’s EZ Access Line at 419-446-2451 or 888-446-2451
  • F&M Bank Customer Service, available Mon-Fri, 8 am-5 pm at 419-446-2501 or 800-451-7843
  • You can claim a tax deduction for contributions you or someone other than your employer make to your HSA even if you don't itemize your deductions on Form 1040.
  • Contributions made by your employer (including those made through a cafeteria plan) may be excluded from your gross income.
  • All contributions remain in your account until you use them.
  • Interest and other earnings on all account assets grow tax-free.
  • Distributions used for qualified medical expenses are tax-free.
  • Lifetime account stays with you even if you change employers or leave the workforce.

To qualify for an HSA, you must meet the following requirements:

  • You must be covered under a high deductible health plan (HDHP).
  • You must have no other health coverage with the exception of coverage for accidents, disability, dental care, vision care, or long-term care.
  • You cannot be enrolled in Medicare.
  • You cannot be claimed as a dependent on someone else’s tax return.

*Under the last-month rule, you are considered an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse’s coverage does not cover you. If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. This is true even if the other person does not actually claim your exemption. Each eligible spouse who wants an HSA must open a separate HSA. You cannot have a joint HSA.

You can write a check or use a debit MasterCard anywhere that MasterCard is accepted. If you need to pay with cash, you can use your debit card to withdraw cash at an ATM.

Yes, and there is no minimum balance to earn interest. Ask about current saving account interest rates.

No, any money contributed and not used will remain in the account. The funds belong to the HSA owner regardless of use or employment status. Any funds remaining at the end of the year simply roll over to the next year.

A Health Savings Account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. You must be an eligible individual to qualify for an HSA. The account is established for the purpose of paying or reimbursing qualified medical expenses for you, your spouse and your dependents. Your employer may have information on HSA trustees in your area. You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. The deadline for regular and catch-up HSA contributions is your federal income tax return due date, excluding extensions, for that taxable year. The due date for most taxpayers is April 15.


Reduces out-of-pocket high-deductible health plan costs.


Tax-deductible contributions, tax-free growth and non-taxable withdrawals.


Yours for a lifetime even if you change employers or leave the workforce.


Any funds remaining at year-end roll over to the next year.

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