Our Dime HSA, in combination with a qualifying high deductible heath plan (1), gives you all the tools you need to succeed. Here’s how it works:

• Dime HSAs are available to individuals covered by a high deductible health plan (HDHP), regardless of whether the person is self-employed or employed by a small employer and regardless of whether their employer maintains the HDHP
• Once your HSA is up and running, you can begin saving money at an accelerated rate thanks to a variety of tax advantages, including: tax deductible contributions, tax deferred earnings and HSA assets that are never taxed
• Once saved, your pre-tax HSA dollars can be used to pay for future medical expenses that are not covered by your health insurance plan – e.g., deductibles & out-of-pocket expenses
• Additional benefits - your accumulated HSA funds roll over every year, they are portable and follow you if you switch to a new high-deductible plan, and they can be used to cover you, your spouse and other dependents in your household

HSAs were created by Congress to combat rising medical costs by providing an incentive for more consumers to participate in paying “first dollar” medical expenses:

• You are eligible to open an HSA account if you are currently participating in a high deductible health plan and are not enrolled in Medicare (see details below)
• An employer may also offer you 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
• For maximum contribution limits please seek tax advice
• The law allows MSAs (tax-exempt savings program phased out in 2007) to be rolled over to HSAs, which is one way a current MSA account holder can immediately take advantage of more favorable HSA rules

HSAs provide significant tax benefits!

• HSA contributions - by employer or employee - are excluded from income
• HSA earnings are tax-deferred
• If used for qualified medical expenses, HSA assets are never taxed
• Unused HSA assets may be used for retirement; however, they will be subject to a 20 percent penalty until the HSA account beneficiary turn 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 account 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

To retain tax-free status, HSA assets should only be used for qualified expenses:

• Actual medical expenses, including doctor visits, prescriptions, transportation to get 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
• Nonqualified uses of HSA assets are subject to taxation and a 10 percent penalty unless the HSA account beneficiary is age 65 or older, dies or is disabled.
• Are covered under an HDHP on the first day of the current 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
• Sole proprietors can benefit from high-deductible health insurance plans which generally have modest premium costs and thus reduce operating costs
• HSAs protect against potentially catastrophic healthcare expenses
• HSAs can be rolled over into retirement plans (at age 65) and thus can serve a dual function – providing for both medical and retirement expenses
• 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
• The custodian or trustee also reports all contributions and distributions from an HSA account where the HSA is held
• To learn more about the benefits of Dime HSAs, call and ask one of our representatives for more details

You are eligible to participate in an HSA if you:

• Are covered under an HDHP on the first day of the current 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

HSAs are ideal for the self-employed:

• Sole proprietors can benefit from high-deductible health insurance plans which generally have modest premium costs and thus reduce operating costs
• HSAs protect against potentially catastrophic healthcare expenses
• HSAs can be rolled over into retirement plans (at age 65) and thus can serve a dual function – providing for both medical and retirement expenses

Caution: HSAs require careful governmental 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
• The custodian or trustee also reports all contributions and distributions from an HSA account where the HSA is held

We want to help you get your money growing!

At Dime Bank, we strive to be the best community bank in Connecticut and Rhode Island by helping you realize your financial goals…

Dime’s full line of Savings Products – statement savings, CDs, IRAs, and more – are part of the plan. Whether you are saving for retirement, a special vacation, your next car, or simply for a rainy day, we have a variety of custom-designed accounts to help you get that nest egg growing and put you on the path to savings success.