The Bath State Bank

Health Savings Accounts (H.S.A.'s) provide a new option for health insurance coverage. Once a High Deductible Health Insurance Plan (HDHP) is purchased by an individual, they become eligible to participate in this tax-sheltered savings account, from which amounts can be withdrawn to pay for medical expenses until the deductible is met and the insurance plan begins to pay.

H.S.A.'s are similar to IRA's in that contributions are tax-deductible going in, and tax-free coming out (when used for a qualified medical expense.) There is no income restriction for contributions; however, there are limits on the maximum annual contribution amount.

Generally, a plan qualifies as an HDHP if it has a minimum $1,100 deductible for self-only coverage and an annual out-of-pocket maximum of $5,500 for 2007. For family coverage, a plan must have a minimum $2,200 deductible and an annual out-of-pocket maximum of $11,000 for 2007. The best way for an individual to determine if he has an HDHP is by asking his/her health insurance company or, if in an employer's health insurance plan, asking his/her employer.

Our H.S.A.'s operate just like a checking account. Deposits/contributions can be made at any time and earn the same rate of interest as our SuperNOW accounts. The account can be accessed by check or debit card when paying medical expenses.