For Details, Contact:
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National Credit Union
Administration 1775 Duke Street Alexandria, VA 22314-3428 Phone: (703) 518-6330 Web Address: http://www.ncua.gov/ |
FOR IMMEDIATE RELEASE |
FCUs Can Serve as Health Saving Account TrusteesJuly 22, 2004, Alexandria, Va. -- The NCUA Board today approved final changes to Parts 721 and 724 of the NCUA regulations, enabling federal credit unions to serve as trustees or custodians for member’s Health Savings Accounts (HSA). The rule implements authority contained in the Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed into law last December by President Bush. Federal credit unions may, after the rule is published in the Federal Register, offer qualified members the opportunity to establish an HSA. To qualify, a member must have a high deductible health plan, defined as one having at least a $1,000 deductible for individual coverage or a $2,000 deductible for family coverage. “Having access to affordable health care is important to all Americans and credit unions are a natural partner to provide these savings accounts for their members,” said NCUA Chairman JoAnn Johnson. Contributions to an HSA are tax deductible, whether or not the taxpayer itemizes other deductions. Income earned on funds in an HSA accrues tax-free, and withdrawals for qualified medical expenses are not taxable. Unused HSA funds may be rolled over and accumulated from year to year, and the account is portable. After retirement, but before eligibility for Medicare, an account owner may use funds in this account to purchase health insurance, including long-term care insurance. Any balance remaining in an HSA when the owner reaches age 65 may be used for any purpose. Upon the death of the account owner, account funds may transfer tax-free to a spouse. Annual contributions to an HSA in tax year 2004 may be up to the lesser of the deductible amount or $2,600, for individual coverage, or $5,150, for family coverage. Additional information on HSAs is available on the U.S. Treasury website www.ustreas.gov. The National Credit Union Administration is the independent federal
agency that charters and supervises federal credit unions. NCUA, with
the backing of the full faith and credit of the U.S. government, operates
and manages the National Credit Union Share Insurance Fund, insuring
the deposits of nearly 83 million members in all federal credit unions
and the overwhelming majority of state-chartered credit unions.
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