Coastal Federal Credit Union launches health savings accounts to help offset medical costs

Raleigh, NC – To help meet the needs of a growing number of its members looking for ways to combat rising costs of medical care, Coastal Federal Credit Union has added Health Savings Accounts (HSA) into its product offering. HSAs were created by Congress as part of the Medicare bill of 2003, and have been touted by President Bush as a way for Americans to save and pay for future medical expenses with pre-tax dollars.

An HSA is a tax-advantaged savings account, designed specifically for covering medical expenses for individuals and their dependents. They are available to those covered by a high deductible health plan (HDHP), policies with annual deductibles that exceed $1,050 for individuals or $2,100 for families. Money from an HSA can be used to pay for doctor visits, prescriptions, dental care, transportation to get care, and certain types of additional healthcare coverage. Unlike flexible-spending accounts, the funds in an HSA earn interest and can be carried over year-to-year.

Contributions into an HSA, whether by an individual or their employer, are excluded from taxable income and earnings on the accounts are tax-deferred. Furthermore, if used to pay for qualified medical expenses, the assets in an HSA are never taxed. HSAs can also serve a dual purpose as a retirement fund similar to an IRA, since assets can be withdrawn penalty-free, although taxable for non-medical expenses, after age 65.

This is good news for the self-employed, who can couple the low premium costs of an HDHP with the tax free growth of an HSA to effectively protect against major medical expenses while saving for retirement.

Generally, you are eligible to participate in a Heath Savings Account is you are covered under an HDHP on the first day of the month, are not covered by another health plan, non enrolled in Medicare and cannot be claimed as a dependant by another person.

Individuals who want to learn more about HSAs and find out if they are eligible to participate are encouraged to visit a Coastal Federal Credit Union branch to review their individual needs with a credit union representative.

Coastal Federal Credit Union was chartered on August 31, 1967. Formed through the efforts of concerned individuals (Who were confident that the Credit Union would help meet the financial needs of their community) our mission in the new century is still centered on delivering quality services and solutions to our membership, and fostering the Credit Union philosophy of “people helping people” in our community.