HSA Account Holders

Health Savings Account FAQs

Mercantile offers a number of options for making contributions to your HSA:

• Set up direct deposit contributions through your employer
• At an ATM using your Mercantile HSA Debit Card
• Online by logging into your Mercantile personal online banking and scheduling a transfer from another Mercantile account or an external transfer account
• In person at any of our branch locations
• By mail with an HSA Contributions Instruction Form to HSA Support

Previous year contributions can be made from January to the April tax filing deadline of the following year. To make a previous year contribution, please complete the HSA Contribution Form and mail it to the Bank along with your check or visit any branch to complete the form and deposit in person. Please note - any wire, ACH or Internet Banking transfers, or other electronic deposits will always be coded as current year contributions and you must notify the Bank and complete the HSA Contribution Form to ensure your deposit is coded properly.

Contact your employer to request that a portion of your payroll be direct-deposited to your Mercantile HSA.

Enroll in Online Banking at www.mercbank.com and choose Enroll in Personal Online Banking. Once enrolled you can login with your Login ID and password.

Yes, however the money you spend for these expenses does not count toward your deductible.

Always present your insurance card before paying for a medical expense to ensure the expense is submitted to your insurance company.

All doctor´s office, emergency room and medical visits should be billed to your insurance company before you pay any expenses. Wait until you receive your insurance statement showing any balances owed before you pay an expense. Your insurance company will keep track of funds that had to be paid by you and will accrue those totals to determine your deductible balance.

Prescription costs are also submitted to your insurance provider so that those costs can also be tracked toward your deductible.

If you used your Mercantile HSA to pay for a non-qualified expense in error, you may be eligible to fix the error and return the funds to your HSA. Please contact one of our HSA specialists for assistance.

Unfortunately, you cannot combine HSA funds owned by two different individuals. If you combine funds from HSAs owned by two different individuals, you could be penalized by the IRS.

Funds in your HSA belong to you and are independent of your employer. You may continue to use the funds to pay for qualified medical expenses tax-free. However, you can only continue to contribute to the HSA if you continue to participate in a qualified High-Deductible Health Insurance Plan after you leave your employer.

You can continue to use the funds in your HSA to pay for qualified medical expenses tax-free after you have retired. When you enroll in Medicare, you can use your HSA funds to pay Medicare premiums, deductibles, co-pays, and coinsurance under any part of Medicare.

When you reach age 65 or older, you may also use the funds in your HSA for non-qualified expenses; however, non-qualified expenses distributed from your HSA are subject to income tax should be reported in your annual income tax filing, but are not subject to IRS penalties.

The funds in your HSA will be passed on to the beneficiary(ies) you named when you set up your Mercantile HSA.

You'll need to complete IRS form 8889. Mercantile will send a number of documents to you with information regarding your HSA that you can use to complete your taxes.

• Your December HSA statement will include a year-end summary of recorded contribution and distribution amounts.
• 1099-SA forms are mailed in January and will disclose the total amount of distributions recorded for the year.
• 5498-SA forms are mailed after April 15th and will disclose the final total of contributions made to your HSA for the year.
• These forms are mailed after April 15th because you are allowed to make Previous Year contributions to your HSA up until the tax-filing deadline.

The many benefits of administering your own HSA make it the right choice for so many different people and scenarios. While every situation is unique, the following represent some of the key benefits associated with a Mercantile Bank HSA.

• Ease of Contributions: Contributions can be made via direct deposit from your paycheck, making a contribution in person at any Mercantile Bank location, using our online banking tools to either deposit a check or make a transfer from another Mercantile account or by initiating an electronic transfer using Mercantile's online banking from your bank account.
• Ease of Withdrawals: Mercantile Bank HSA account holders receive a Mercantile Bank HSA debit card that can be used to cover eligible expenses from your healthcare provider just like traditional debit cards. Providers can swipe the card and the total of the eligible expenses are automatically deducted from your account. No transfers and no balancing accounts.
• Ownership of Account: Unlike "Flex" accounts that are funded yearly and operate under a "use it or lose it" scenario, HSAs and the accumulated balance of funds remain the property of the employee and continually "roll over" every year without penalty or risk of loss. This way, HSA customers can increase the account balance by earning interest on funds that are not applied to a qualified medical expense.
• Build on the Value of Your Account: Mercantile Bank HSAs provide some of the most competitive interest rates available.
• Tax Advantages Abound: Contributions made to your HSA are 100% tax deductible just like an IRA (up to the legal limit). If your employer offers payroll deductions, you can make contributions to your account in pre-tax dollars when the allocated deduction is removed prior to taxes being applied. Contributions can also be made as an above-the-line deduction that allows you to reduce your taxable income by the amount you pay into your HSA saving you money every pay period. Please consult with your tax advisor regarding the tax benefits of Health Savings Accounts.
• Going Mobile: Because you own your HSA plan, it follows you everywhere. Whether you are making a career change, moving to another state, or temporarily find yourself between jobs, the money in your HSA is yours to keep and apply toward all approved out-of-pocket healthcare costs you may incur.
• Future Benefits: Even as you age and consider retirement, your HSA will deliver big dividends. HSA funds can be used toward qualified long-term care premiums as well as Medicare premiums and out-of-pocket expenses. Your funds can even be accessed to cover future living expenses after the age of 65 (taxed at your future income tax rates.)

Funds that are withdrawn to pay costs not covered by a high-deductible insurance plan can be accessed tax free for the qualified medical expenses listed below. Funds withdrawn to cover costs not associated with qualified medical expenses are subject to taxes at your current tax rate and an additional 20% tax penalty.

Examples of eligible medical expenses

(potentially covered by HSA funds)

• Acupuncture
• Alcoholism treatment
• Ambulance
• Artificial limb
• Artificial teeth
• Breast reconstruction surgery (mastectomy-related)
• Chiropractor
• Contact lenses and solutions
• Cosmetic surgery (if due to trauma or disease)
• Dental treatment (X-rays, fillings, braces, extractions, etc.)
• Diagnostic devices (such as blood sugar test kits for diabetics)
• Doctor´s office (including physicians, surgeons, specialists or other medical practitioners) visits and procedures
• Drug addiction treatment
• Drugs, prescription
• Eyeglasses and exams (for medical reasons)
• Eye surgery (such as laser eye surgery or radial keratotomy)
• Fertility enhancements
• Hearing aids (and batteries for use)
• Hospital services
• Laboratory fees
• Long-term care (medical expenses and premiums)
• Nursing home
• Nursing services
• Operations/surgery (excluding unnecessary cosmetic surgery)
• Osteopath
• Physical therapy
• Psychiatric care
• Psychologist
• Special education (for learning disabilities)
• Speech therapy
• Stop-smoking programs (including nicotine gum or patches)
• Vasectomy
• Weight-loss program (to treat a specific disease diagnosed by a physician)
• Wheelchair

Ineligible medical expenses

(not covered by an HSA and subject to taxation plus 20% tax penalty)

• Advance payment for future medical care
• Amounts reimbursed from any other source (such as other health coverage or a Flexible Spending Account)
• Babysitting, child care and nursing services for a normal, healthy baby
• Betting (including lottery, gaming, chips, or track wagers)
• Cosmetic surgery (unless due to trauma or disease)
• Diaper service
• Electrolysis or hair removal
• Funeral expenses
• Gasoline
• Health club dues
• Household help
• Illegal operations and treatments
• Maternity clothes
• Meals
• Nutritional supplements
• Over-the-counter drugs and medicines other than those used exclusively for medical purposes
• Personal use items (such as a toothbrush or toothpaste)
• Swimming lessons
• Teeth whitening
• Weight-loss program (unless prescribed to treat a specific disease)

A Health Savings Account (HSA) delivers added benefit to employees with an existing qualified high-deductible health insurance plan. Employees can use their HSA to support costs not covered by an existing employer-administered insurance plan. Prescriptions, co-pays and deductibles are just some of the eligible expenses that a Mercantile Bank HSA can help.

• A Mercantile Bank HSA combines a bank account with a High Deductible Health Plan (HDHP) featuring an annual deductible.
• The HDHP covers catastrophic illness and injury claims for individuals and their families.
• The HSA is used to cover routine expenses until the deductible is met.
• Both individuals and employers may contribute money to an HSA.
• Balance of the account grows tax-deferred from year to year.
• HSAs are fully portable and can move from job to job.

Anyone who is:

• Covered by a high-deductible health insurance plan
• Not covered under another health insurance plan
• Not enrolled in Medicaid
• Not being claimed as another person's dependent

If you meet all the criteria above, we encourage you to Open an HSA Account or to contact a Mercantile Bank HSA specialist to get your questions answered so you can begin to experience the benefits of a Mercantile Bank HSA.