Health Savings Accounts

LandMark Bank now offers a LandMark Checking Health Savings Account (HSA). LandMark Bank is among the first Sarasota area banks to respond to the need in the market with this new product.

The LandMark Health Savings Account is an interest bearing account with tiered interest levels, and there is no minimum balance. With a current deposit relationship, the setup fee of $15.00 and monthly service fee of $2.00 is waived. The first order of checks is free and the account includes a debit card which can be used for qualified distributions.

Frequently Asked Questions About HSAs:

What are Health Savings Accounts?

Health Savings Accounts (HSAs) are tax-favored consumer savings arrangements for individuals and families covered by high deductible health insurance plans (IRC Sec. 223). HSAs were legislated by the Medicare Prescription Drug and Modernization Act signed by President Bush on December 8, 2003 and became available January 1, 2004. IRC Sec. 223, Notice 2004-2, and Notice 2003-50, provide the most inclusive guidance on HSAs available.

An HSA allows for tax-deductible contributions and all distributions are tax free as long as they are done for "qualified medical expenses." There is no limit on the total number of HSAs that can be setup; participants need not be self-employed or employed by small employers to qualify for the Health Savings Account.

How can HSAs benefit employers?

HSAs can provide a tax deduction for contributions made on behalf of employees, lower overall health insurance costs by changing from more expensive health plans to a less costly (High Deductible Health Plan) HDHP, and assist in the attraction and retention of employees as a result of providing expanded employee benefits.

How can HSAs benefits eligible individuals?

HSAs allow contributions that are not used for current medical expenses to be carried over to the following years and be used tax-free for future qualified medical or retirement health expenses. HSAs also create an additional source of taxable retirement income if HSA assets are not used for qualified health care expenses and provides asset portability so individuals can take their HSA assets wherever they go.

HSAs also provide individuals with a deduction for HSA contributions they make on their own behalf, or the ability to make pre-tax contributions if the contributions are made through their employer's cafeteria plan. An HSA offers a lower priced health care option if the individuals share the cost of health insurance with their employer.

Who is eligible?

Eligibility is based on a number of criteria. Generally, qualified individuals include those who:

• Are covered under a qualified high deductible health plan on the first day of the month in which the HSA is established;
• Are not covered by any other health insurance that reimburses them for health expenses (exceptions exist for insurance that covers accidents, disability, dental care, vision care, long-term care, and other "permitted insurance" which includes insurance covering specified diseases or illnesses, liabilities incurred under workers' compensation laws, tort laws, relating to ownership or use of property (e.g., automobile insurance), or that provides a fixed payment for hospitalization expenses.);
• Are not enrolled in Medicare or Medicaid;
• Are not a minor dependent or a dependent on another person's tax return; and
• Have not received VA benefits in the previous three months.

What is a high deductible health plan?

These are plans with the following characteristics:
For 2007,
Self Coverage: minimum deductible of $1,100 and out-of-pocket limit not to exceed $5,500.
Family Coverage: minimum deductible of $2,200 and out-of-pocket limit not to exceed $11, 000.

Each year, these limits are adjusted based on the cost of living (rounded to the nearest $50), and provisions refer only to the in-network benefits (i.e., out-of-network benefits can be less generous).

How can I find out if I am eligible for an HSA?

It is strongly recommended that you contact a tax or legal professional to see if you qualify for a Health Savings Account.

What are qualified distributions?

Qualified distributions are funds used to pay for qualified medical expenses as defined under Section 213 (d) of the Internal Revenue Code, premiums for COBRA continuation, qualified long-term care insurance and expenses, Medicare and retiree health insurance premiums, but not Medicare Supplement premiums, and Health insurance premiums for individuals receiving unemployment compensation.

The information contained here is only a general guideline, and we encourage every customer interested in establishing a Health Savings Account to first consult their tax professional. Once you have determined your eligibility for an HSA, contact your LandMark banker at 941/954-5100 to set up your account.