The money in an Invested Health Savings Account (HSA) is always yours, even if you change jobs, switch your health plan, become unemployed, retire or move to another state. And you start earning interest on the balance in your account from day one. No waiting or vesting periods. If you’ve ever put money into a flexible spending account, you know that there’s a use-it-or-lose-it rule—spend your balance each year or lose it forever. However, with an HSA, your unused balance rolls over from year to year so you never lose the money. And the longer you save it, the longer it accrues interest.

An HSA is a great place to build up savings for expenses you have today or will have in the future. Injuries or a new diagnosis might mean you need to pay a lot of bills at one time. Or you may need to cover expenses that count toward your deductible like doctor visits or prescription drugs. If your budget isn’t flexible, use your HSA to pay bills this year.

But if you can afford to pay bills out of pocket and save the money in your HSA for the future, then your HSA balance may grow through interest and investment earnings. That way you’ll have more money for expenses when you need it most—whether in a year, 10 years or in retirement.

To take advantage of such great tax breaks, the IRS says that only eligible individuals can save in an HSA. To open and contribute to an HSA, you:

• Must participate in an HSA-qualified high-deductible health plan (HDHP);
• Can’t participate in another health plan that’s not a highdeductible health plan (for example, a spouse’s plan). Some exceptions may apply (get more details in IRS publication 969 at www.irs.gov);

Partial-year participation: If you open your account mid-year or become ineligible midyear, your contribution limits may be impacted. If you are married, your spouse’s participation in a health care flexible spending account or other family health insurance coverage may change your eligibility.

You can build your HSA balance in three ways:

1. Payroll Contributions
2. Direct Contributions
3. Employer Contributions

Getting Started

An HSA helps you set aside money for current and future health care expenses that aren’t covered by your medical plan. You can make contributions to your HSA, up to IRS limits. For 2020, the maximum contribution amount from all sources—your contributions, your employer’s contributions and any other sources—is $3,550 for individual coverage and $7,100 for family coverage. For 2021 the maximum contribution amount will be $3,600 for individual coverage and $7,200 for family coverage

To contribute to an HSA, you must be enrolled in a highdeductible health plan (HDHP). An HDHP is a health plan that meets two requirements as specified by the U.S. Treasury Department. First, it must have an annual deductible that meets the minimum deductible amount, which is published annually. Second, the annual out-ofpocket expenses—such as deductibles, copayments and other expenses paid for by the participant—associated with the HDHP may not exceed the specified out-of-pocket maximums. Premiums (the amount you pay each month for coverage) do not count as out-of-pocket expenses.

You choose how much you’d like to save in your HSA each year and contributions are automatically made from your paycheck to your account. See Question 8 for additional contribution methods. You can choose to pay for current eligible medical expenses with your HSA. Or you can choose to pay for current expenses out of your pocket and save the money in your HSA to pay for future medical expenses. How you use your account and when you use it are entirely up to you.

Yes. Your HSA deposit account balance is FDIC insured. Once you have $1,000 saved in the HSA, you have the opportunity to open a UMB HSA Saver®1 investment portfolio to have the option to make investments in securities that carry various levels of risk and reward, similar to investment in a retirement savings plan.