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HSAs

HSA-Chart -2011-(REV)

A Health Savings Account (HSA) is a tax-free way for people covered by high-deductible insurance, or a High-Deductible Health Plan (HDHP), to put funds aside for anticipated healthcare expenses. An HSA shares many characteristics with an Individual Retirement Account (IRA), and like an IRA, it can be used for retirement. Unused funds in the HSA are carried over from year to year and continue to earn tax-free interest until the funds are withdrawn. 

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Eligibilty


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

  • You are covered under a High Deductible Health Plan (HDHP)
  • You have no other health coverage besides an HDHP 
  • You are not enrolled in Medicare or Medicaid
  • You are not eligible to be claimed as a dependent 

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 the deduction.

Each individual who is eligible for an HSA must open a separate HSA. HSAs are titled as individual ownership; you may designate a beneficiary and for convenience you may appoint an authorized signer.



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Eligible Expenses


Choose an HSA to pay for qualified medical expenses*:

  • Medical services (including dental and vision care)
  • Hospital costs
  • Prescription drugs
  • Over-the-counter drugs
  • Long-term care insurance
  • Health insurance premiums during any period of unemployment

*This is only a partial list. Visit treasury.gov for more information including a complete list of qualified expense.



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Benefits


Special advantages of a STAR Health Savings Account:

  • Competitive interest rate
  • No transaction fees when you use STAR online banking
  • Low monthly maintenance fee is waived when you sign up for STAR's free online banking
  • Monthly e-mail with a direct link to your HSA online statement where you can check your contributions and distributions and view cancelled check images
  • Free STAR online banking also gives you fast access to your HSA records, making it easier to prepare yearly taxes
  • If you change employers, your STAR HSA moves with you, without rollover paperwork


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Contributions


You want to enjoy the tax benefits and advantages of a Health Savings Account. We Understand. An HSA features many tax benefits that make it not only a useful tool for managing medical expenses but also a very attractive retirement savings option:

With an HSA, you may claim a tax deduction for contributions that you, or someone other than your employer, made to your HSA even if you do not itemize your deductions on Form 1040. 

Contributions to your HSA made by your employer may be excluded from your gross income, including contributions made through a cafeteria plan.

  • HSA interest earned is tax-free 
  • Distributions may be tax-free if you use them to pay for qualified medical expenses


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Rollover Rules


Rollovers from Archer MSAs and other HSAs are permitted. Only one rollover per year is allowed. A rollover to a new HSA must be completed within 60 days. These restrictions follow the IRA rollover rules.

Direct trustee-to-trustee transfers of HSA funds are not subject to the rollover restrictions. Thus, multiple trustee to trustee transfers are allowed in a single year. Both trustees must agree to do the transfer and they are not required to do so.

Direct rollovers from 401(k), 403(b) and 457 plans are not permitted.

To rollover your HSA to STAR click to view our Rollover Kit.



Additional Options

  • GOOpen an Account
  • GOContact Us
  • GO2013 HSA Guidelines
  • GOPharmacy Prescription Discounts
  • GOFrequently Asked Questions