Health Savings Accounts (HSA)

It’s no secret that health care continues to get more complicated and more expensive.

If you’re looking for more control over what you pay for health care, a health savings account (HSA) might be a good place to direct your dollars. HSAs are a tax-advantaged account used in combination with high deductible health plans (HDHP)— health insurance plans that carry a high deductible.

With an HSA, you can deposit pre-tax dollars and any interest you earn is also tax free. This allows you to spend pre-tax dollars on qualified medical expenses that your insurance doesn’t cover. You should speak with a tax advisor regarding the deductibility of interest and potential tax savings.

Here’s how it works: a HDHP generally has a lower monthly cost (premium) than traditional health insurance, but a higher deductible (money you pay before your health insurance policy kicks in). So you pay less for your insurance, but potentially more for your health care until you meet your deductible. To help meet those costs, many people with HDHPs direct the money they save in monthly premiums to a special bank account designed just for medical expenses—an HSA.

But there are other benefits to opening an HSA, too.

First off, unlike a flexible spending account (FSA) or cafeteria plan, all the money you set aside in an HSA is yours to keep. Anything you don’t spend this year isn’t lost. The money remains in your account year after year, where it can be invested, grow and then spent on future health care expenses.

As long as you spend the money and any earnings on qualified medical expenses (as defined by the IRS), you won’t pay taxes on it.

Once your Pinnacle Bank Health Savings Account reaches a balance of $1,000 or more, you will be eligible to invest a portion of your funds in an HSA Investment Account.   Click here to learn more about the HSA Investment Account.

Is an HSA right for me?

To be eligible, you must have a high deductible health plan (HDHP) along with a valid social security number and a primary U.S. residence. You may not be covered by any other type of health plan, including Medicare, and you cannot be claimed on anyone's tax return as a dependent (except your spouse).

Contributions are made with pre-tax dollars, so your account grows tax-free. Each year the IRS sets new contribution limits.

2024 Single Plan Contribution Limits

Maximum Contribution


Minimum Deductible


Maximum Out-of-Pocket


Catch-Up Contribution (55+)

Up to an additional $1,000. Maximum total $5,150/year

2024 Family Plan Contribution Limits

Maximum Contribution


Minimum Deductible


Maximum Out-of-Pocket


Catch-Up Contribution (55+)

Up to an additional $1,000 for each spouse if ages are 55 or greater.

Fees and Access

There is a one-time $25.00 setup fee. After that, your HSA is free when you maintain a balance of $500. Otherwise, there is a modest $3 maintenance fee each statement period.

You can pay for your medical expenses using a Visa® debit card, writing a check, or by making an electronic transfer or cash withdrawal. 

You can use this money for other kinds of expenses, but those withdrawals will be taxed.

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