Health Savings Account (HSA)

Concerned about the increasing costs of health care?

So are we. As healthcare costs continue to climb, we continue to look for ways to help our members save. Our tax-free1 Health Savings Account (HSA) and our medical and dental discount programs help you save on doctor visits, dental care, prescriptions, and more.

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A Health Savings Account (HSA) has three primary advantages:

  1. Money deposited in your account can be deducted from your Federal taxes.1
  2. While your money is in your account, it will enjoy tiered–interest, tax–free growth.1
  3. You can use the funds in your account to pay for qualified medical expenses, allowing you to cover some or all of the costs your insurance doesn’t cover.

The Patelco HSA comes with tiered interest rates that increase as your balance gets bigger. It also comes with an HSA Debit Card and/or checks, allowing you to access your tax-advantaged account as easily as any other.

To open an HSA, you must have a high-deductible health plan.

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You can also open an account by visiting a local branch.

For more information or with any questions about Health Savings Accounts, including how to open one, call 800.358.8228.

Additional Forms

In addition to the online application, you may also need to complete these forms2, depending on your situation:

Note: Health Savings Account format for Direct Deposit and ACH Transfers: Learn more >

Submit completed forms by mail to:
For standard delivery (New Account):
Patelco Credit Union
HSA Department #25
P.O. Box 8020
Pleasanton, CA. 94588

For standard delivery (Existing Account):
Patelco Credit Union
HSA Department
P.O. Box 2227
Merced, CA. 95344
For overnight delivery (New Account):
Patelco Credit Union
HSA Department #25
5050 Hopyard Rd.
Pleasanton, CA. 94588

For overnight delivery (Existing Account):
Patelco Credit Union
HSA Department
3009 Stratofortress St.
Atwater, CA. 95301
Employers or HR Professionals

Employers or HR Professionals must complete the HSA Employer Contribution Form2 to fund their employees’ Health Savings Accounts. Please list your employees' names (the HSA Owner), their account numbers, and the funds to be contributed to the accounts.

For more information, please visit HSADirect.org and click the “Employers” tab.

Special notice regarding changes to Health Savings Accounts

Health Savings Account Details & Frequently Asked Questions

What are the HSA tiered rates?

HSA Tiered Rates
Min. Balance APY Rate Dividends Paid
$0.00 0.05% 0.05% Monthly
$2,000.01 0.10% 0.10% Monthly
$3,500.01 0.25% 0.25% Monthly

What are qualified medical expenses?

In order for HSA assets to retain their tax-free status, they may only be withdrawn and used for certain expenses. These expenses include:


  • actual medical expenses, including doctor visits, prescriptions, transportation to get to medical care, and dental care
  • long-term care insurance
  • healthcare coverage when unemployed
  • certain continuation-of-benefit healthcare coverage
  • certain health insurance after age 65

For a comprehensive, up-to-date list of qualified medical expenses, visit www.irs.gov – search for "Publication 502, Medical and Dental Expenses".

Who is eligible to open an HSA?

You are an eligible individual for any calendar month if you:


  • are covered under an HDHP on the first day of such month;
  • are not also covered by any other health plan that is not an HDHP (with limited exceptions)
  • are not enrolled for benefits under Medicare (generally not yet age 65)
  • are not eligible to be claimed as a dependent on another person's tax return

Still not sure whether you qualify for an HSA? Call us at 800.358.8228.

What are the specific tax benefits of an HSA?

Not only can HSAs provide tax benefits related to paying qualified medical expenses, they may also provide benefits similar to many tax–favored retirement plans:


  • HSA contributions—by employer or employee—are deductible from federal taxes up to the maximum allowable amount.
  • Dividends earned are free from federal tax.
  • If used for qualified medical expenses, withdrawals are free from federal tax.
  • Some states allow tax-deductibility and do not tax dividends earned. Consult your tax advisor.
  • Unused HSA assets may be used for retirement; however, they will be subject to a 10 percent penalty until the HSA beneficiary turns age 65. If not used for medical expenses, they will be subject to income taxes.
  • Upon death, HSA assets become the property of a named death beneficiary, or of the HSA beneficiary's estate. A spouse may treat the assets as his or her own HSA, while non-spouse death beneficiaries must treat such assets as ordinary taxable income.

What is considered a High-Deductible Health Plan?

An HDHP is an insurance policy that meets certain dollar limits as shown in the table below:

2013 HDHP Limits*
Plan Coverage Self Only Family
Annual Deductible Not less than $1,250 $2,500
Annual Deductible plus out-of-pocket expenses cannot exceed $6,250 $12,500
2014 HDHP Limits*
Plan Coverage Self Only Family
Annual Deductible Not less than $1,250 $2,500
Annual Deductible plus out-of-pocket expenses cannot exceed $6,350 $12,700

*HDHP and contribution limitations are revised each year to reflect cost-of-living increases.

Is there a fee associated with the HSA?

Yes. There is a $2 monthly fee for a Patelco HSA. This fee is waived if you are a Commitment Household Member.

Is there a penalty for using HSA funds for non-medical purposes?

Yes. Those who withdraw their HSA funds for non-medical purposes will see a tax penalty of 20% of the total withdrawal.

Can self–employed individuals open an HSA?

Sole proprietors and others who are self-employed can have an HSA, and are, in fact, often ideal candidates for an HSA. In such situations, the business owner is both employer and employee. HSAs are often advantageous for the self–employed because:


  • high–deductible health insurance plans generally have modest premium costs, and may be an effective cost–containment mechanism
  • the self–employed individual is protected against potentially catastrophic healthcare expenses, and
  • the HSA may serve the dual purpose of providing for both medical and retirement expenses

What are the HSA contribution rules?

The total amount you or your employer may contribute to an HSA for any taxable year is dependent upon whether you have individual or family coverage under a high deductible health plan as shown in the table below.


2013 Contribution Limits*
Plan Coverage Self Only Family
Annual Contribution Limit $3,250 $6,450
2014 Contribution Limits*
Plan Coverage Self Only Family
Annual Contribution Limit $3,300 $6,550

*HDHP and contribution limitations are revised each year to reflect cost-of-living increases.

In addition to the standard HSA contribution limits shown in the previous table, if you have attained age 55 before the close of a taxable year, you may also contribute an additional amount known as a "catch-up" contribution:

Catch–up Contribution Limits
Taxable Year Maximum Catch–up
2009 and later $1,000

Do HSAs require reporting?

HSAs require the following government reporting:

  • HSA holders must report all contributions and distributions on their individual income tax returns.
  • An employer contribution is reported on a business tax return, as well as on the W-2 form of any employee receiving an employer contribution.
  • All contributions and distributions from an HSA account are also reported by the custodian or trustee where the HSA is held.

Can an employer offer or contribute to an HSA?

An employer may offer HSAs through a cafeteria plan. Employer contributions to an HSA reduce what an individual can contribute, but they do not eliminate an individual's ability to contribute.

My question isn’t answered here, what should I do?

If you have any additional questions regarding a Patelco Health Savings Account, you may be able to find the answer at our full HSA site: www.hsadirect.org. Or you can call us to speak with an HSA expert: 800.358.8228.


  1. The information on this page is provided by Ascensus Inc. and the IRS and is not intended as tax advice. Some States do not provide tax benefits. Please consult a tax professional.
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