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Health Savings Account (HSA)

Health Savings Account (HSA)

The 2020 limits for contributions are $3,550 for individuals and $7,100 for families.


A health savings account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying qualified medical expenses for beneficiaries covered under a qualified high deductible health plan (HDHP). With an HSA, you can pay for current and future eligible medical, dental and vision expenses. The funds can be withheld through payroll deduction, and therefore employees pay no federal, state, and social security taxes. The employer also saves the matching FICA taxes.

You own and control the funds in your HSA. The money you contribute to your HSA is federally tax-deductible, whether or not you itemize deductions. Your funds can be conveniently accessed by a debit card to pay medical expenses.

In order to open an HSA, you must:

  • Be covered by a qualified high deductible health plan (HDHP). 

  • You cannot be covered by any other health plan that is not a HDHP,

  • Not be enrolled in Medicare

  • Not be claimed as a dependent on another person’s tax return. 


An HDHP costs less than traditional health care plans due to the higher deductible, so the money saved on premiums can be added to your HSA.

Federal limits dictate how much can be contributed to an HSA each year. It also provides a $1,000 catch-up provision for individuals over age 55 (not enrolled in Medicare).

 Accessing HSA Funds/Investments

What is the benefit of a Debit Card?

  • It conveniently helps the participant with cash flow

  • The card pays directly to the provider at the point of sales

  • It adds a convenience to accessing participant funds


Personal HSA Checks

You have the ability to receive a book of checks to access your funds in addition to the debit card. Checks can be used to make payments for services or pay participants back for expenses paid not using the HSA funds.

HSA Banking Options

Rocky Mountain Reserve offers employers the choice of different banks to serve as custodians for the actual HSA bank accounts. RMR has partnered with two different banks. Avidia is a regional bank based in Massachusetts. UMB is a national bank with offices in Colorado.

Comprehensive online and mobile account access for participants and employers rounds out the RMR HSA solution. Through the web portal, smartphones and tablets, participants are empowered to manage HSAs with access to interactive education, balances, funding capabilities, transaction and contribution history, investments, bill pay, statements, tax forms, and more. Employers are provided powerful self-service capabilities to perform account maintenance, funding and reporting tasks.

Avidia Bank HSA



“Avidia Bank is an FDIC insured, a full-service financial institution located in Massachusetts, with a focus on Health Savings Account Administration. We offer big bank financial services at an affordable price with the personal attention provided by smaller financial institutions. We are a strategic partnership with leading technology vendors such as FIS and Alegeus. Avidia Bank is committed to its independent course in an industry increasingly dominated by large, impersonal organizations. Our size, combined with our strategic partners, allows for a scalable solution at an affordable price.”







“UMB Healthcare Services, a division of UMB Financial Corporation, is a leading provider of health savings accounts and healthcare spending account cards with more than $1 billion in HSA assets. For the sixth straight year, UMB was ranked as one of America’s Best Banks by Forbes and SNL Financial. For over 100 years, UMB has made a commitment to principled and sound practices, we simply do not chase short-term earnings or growth at the expense of our future. 

As a national leader in HSA Custodial Services, we offer fully integrated, fully customizable packages, as well as turn-key options. Our nationwide network of sales representatives work closely with our partners to meet your unique needs, creating entirely customized options to keep you on the leading edge of your industry.”



Additional Information

Note: If you use the funds for expenses other than health care-related expenses, you must pay income tax plus a 20% penalty. Upon attaining age 65, you may also use the funds for non-medically related expenses. You will only have to pay income tax on the withdrawals at that point.

Employers and Brokers


Non-discrimination Testing

HSA Plans and Cafeteria Plans are subject to nondiscrimination testing. The testing may limit the extent to which a Highly Compensated or Key Employee may participate in a Cafeteria Plan.

After Rocky Mountain Reserve receives the initial enrollment information we will calculate the discrimination tests. If the Plan is close to failing the test we will calculate the test once each quarter. If the plan is not close, we will make a final calculation at the end of the plan year.


New and Existing Cafeteria Plans

Rocky Mountain Reserve will assist you with plan design, plan documents and a summary plan description to ensure the plan is in compliance.

Mid-year vs. Plan Year Switch

It was traditionally thought that the best time to make a change was at the end of the plan year. With the experience that RMR’s employees have with new and existing plan setups, the transition process can be done at any time.


  • Rocky Mountain Reserve consults on setups

  • Client signs Service Agreement

  • Client assigned to a Rocky Mountain Reserve Senior Account Administrator

  • Enrollment materials prepared

  • Enrollment meetings held

  • Client collects enrollment information and provides a copy to Rocky Mountain Reserve

  • Initial discrimination testing performed by Rocky Mountain Reserve

  • Debit cards issued to participants

  • Payroll deductions commence by the Client

  • Payroll information provided to Rocky Mountain Reserve


If this is a new plan or existing plan will need the following information and prefer to receive it at least 2 weeks prior to the beginning of your plan year or the date of takeover for midyear changes.

  1. Demographic Information that includes; name, physical address, SSN, date of birth, phone number, email address (template will be provided)

  2. Election Information that includes; name, annual election, per pay start date and benefit code (template will be provided)


How to Participate in a Plan

Employees elect to participate in the plan. By choosing to participate they agree to have their compensation reduced by their annual election. RMR will assist the participant in creating their own account and provide regular assistance to the client.

Cafeteria plans offer substantial tax savings. Unfortunately, some employees do not receive those benefits because they don't fully understand the value of the benefit of how the plan operates. Our specialty is increasing participation in new and existing plans. We bring added credibility to the plan because we are a truly independent administrator; our compensation is not tied to the level of participation of the individual employee.

We feel a large part of our efforts should be to educate participants so they can make an informed decision concerning their participation. We offer onsite group enrollment meetings to educate employees and offer them in-person assistance.

Our attendance at enrollment meetings and the associated enrollment materials are included in our fees. We charge nothing for our time or materials but we do charge for the costs associated with travel for meetings outside of Colorado.



Contributions via payroll deduction can be sent to Rocky Mountain Reserve for posting to participant’s accounts in a variety of ways. Funds can be wired to RMR, sent via check, or RMR can pull the funds from your account via ACH.

With this method, we prefer to receive a contribution file each pay period to ensure accurate accounting. We will provide templates. This data can be sent in a variety of electronic file formats including Excel or CSV. We can also provide a secure FTP site to ensure the information is transferred securely.