Health Savings Accounts

Health Savings Accounts are a great way to set aside money for qualified medical expenses. An HSA with First Federal Savings Bank, provides you with control, tax savings and flexibility.

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HSA Benefits

First Federal Savings Bank HSA's offer many benefits and features for our customers:

  • No monthly service charge
  • Free debit card
  • Competitive rates
  • 24-hour online access
  • Free online banking and e-statements


Health Savings Accounts can come with many questions. Here are a few of the most common questions we have received on them!

What are health savings accounts?

Health savings accounts (HSAs) are tax-favored savings arrangements for individuals and families covered by high deductible health insurance plans.

HSAs allow for tax-deductible contributions and tax-free distributions if distributed amounts are used to pay for qualified medical expenses. Qualified medical expenses include expenses incurred by spouses and dependents even if they are not eligible for an HSA. Although employers may contribute to an employee's HS, each HSA is owned and controlled by the individual, not the employer. An eligible individual who is an employee may establish an HSA with or without involvement of the employer.

Who is eligible to establish an HSA?

Any eligible individual may establish an HSA. To be eligible, an individual must meet all of the following requirements:

  • Covered under a high deductible health plan (HDHP)
  • Not covered by any health plan that is not an HDHP
  • Not enrolled in Medicare
  • Not able to be claimed as a dependent on another person's tax return
How are HSA distributions taxed?

Distributions from HSAs may be exempt from federal income tax and penalties, depending on whether or not the distribution is used to pay for qualified medical expenses.

Qualified distributions: Distributions from HSAs for qualified medical expenses of the HSA owner, his or her spouse, or dependents are exempt from federal income tax and penalties.

Nonqualified distributions: Distributions that are not used for qualified medical expenses can be included in the individual's gross income. In addition, nonqualified distributions are subject to a 20 percent additional penalty tax, unless the distribution is made after the HSA owner's death, disability or attainment of age 65.

Note: HSA owners are responsible for making the determination as to whether HSA distribution is qualified or nonqualified. The HSA owner should maintain records of his or her medical expenses sufficient to show that the distributions have been made exclusively to pay for qualified medical expenses, and are, therefore, excludable from gross income. HSA trustees or custodians, as well as employers who make contributions to an employee's HSA, are not responsible for determining whether distributions are qualified or nonqualified.

First Federal Savings Bank will provide your HSA tax form for income tax reporting after year end.

Learn More about Our HSA

Interested in learning more about First Federal Savings Bank HSA's? Contact your local branch today.