Health Savings Account

What’s a Health Savings Account?
An HSA is an account that accumulates funds to cover your (and your family’s) health care expenses. It is paired with a qualified High Deductible Health Plan (HDHP). An HSA offers you the following advantages:

• Tax Savings. You contribute pre-tax dollars to the HSA. Interest accumulates tax-free and funds are withdrawn tax-free for health care expenses. You can use the money in your HSA to pay for eligible health, dental and vision expenses as listed in IRS publication 502.
• Invest the funds and take them with you. Unused account dollars will continue to roll over from year to year and are yours to keep even if you stop working. Additionally, you can invest your HSA funds, so your available health care dollars can grow over time. The money can be used for future out-of-pocket health care expenses.
  HSA funds can also be used for the health care expenses of your legal spouse and tax dependent children – even if they are not enrolled in the Company’s HDHP plan.

The HSA is your account that you own and you control. You are responsible for paying bills from your account and maintaining records for tax purposes. You are also responsible for making sure that the contributions to your account do not exceed the IRS maximum.

Who is eligible for the HSA?
In order to open an HSA, you must meet the below eligibility requirements:

• You must be covered by a qualified high deductible health plan. You cannot be covered under any other health insurance that is not an HDHP.
• You cannot be enrolled in Medicare, Medicaid, TriCare.
• A traditional Medical FSA is not allowed in conjunction with a HSA. If your spouse participates in an employer’s Medical FSA, it disqualifies you from opening and contributing to an HSA.
• You cannot be claimed as a dependent on someone else’s tax return.

HSA Contributions
If you are enrolled in the HDHP plan, the Company will make contributions to your HSA account on a monthly basis:

• HDHP Individual Coverage: $1,700 annually ($141.67 per month)
• HDHP Family Coverage: $3,400 annually ($288.33 per month)

You may also make pre-tax contributions to your HSA via payroll deduction. You can start, stop, or change your payroll deduction at any time.

2026 IRS Annual Maximum Contribution to HSA Account
Individual Coverage: $4,400
Family Coverage: $8,750
Catch-Up Contribution (age 55+): Additional $1,000

The IRS maximum contributions above include all deposits/contributions made during the calendar year (both your contributions and the Company’s). It is important to be mindful of the annual limits, as you will incur penalties for exceeding the maximum contribution amounts.

Paylocity
MTC Holding Corporation has established an HSA relationship with Paylocity and will pay the monthly service fee for your account as long as you are employed. However, the Company does not have access to your HSA information at Paylocity. For more information on Health Savings Accounts, please log into the self-service portal at paylocity.com.

Additional Details
Any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate, in addition to a 20% tax penalty for individuals under age 65. Withdrawals made past age 65 are taxable, but no penalty applies.
Once you turn age 65 and enroll in Medicare, you can no longer contribute to your HSA. However, you may continue to spend and/or save the balance in the HSA

There is an important difference between the Patient Protection and Affordable Care Act (ACA) rules and HSA rules regarding dependent coverage. The ACA requires major medical plans to cover dependents up to age 26, but it does not require said dependents to be tax dependents. To use HSA funds for dependent expenses, the dependent must be able to be claimed as a dependent on the HSA owner’s tax return.

Click the button below to watch a video to learn more about your Health Savings Account benefits.
Health Savings Account Benefits