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Health Savings Account (HSA) Disclosure

This Agreement is made between the Bank and the individual (the "Depositor") who signs the application and signature card or other documents. The Depositor is establishing a Health Savings Account under section 223 of the Internal Revenue Code to provide for his or her uninsured medical expenses. Depositor acknowledges receipt via the web of the accompanying Disclosure Statement.

The Depositor and The Bancorp Bank (the "Custodian") make the following agreement:

ARTICLE I:
The Custodian may accept additional cash contributions on behalf of the depositor to the Health Savings Account for a tax year of the Depositor. The total cash contributions are limited by the state or federal law. The Depositor shall have sole responsibility for insuring that these limits are not exceeded.

ARTICLE II:

  • This Custodial account is created exclusively for the purpose of paying the qualified medical expenses of the Depositor as required by law. The Depositor shall have the sole responsibility for insuring that all withdrawals from the HSA comply with this requirement and that the Depositor's activities in connection with the custodial account are not otherwise in violation of state or federal law. Any taxes, interest or penalties incurred for Depositor's violation of this responsibility shall be the sole obligation of the Depositor.
  • Funds held in the custodial account may be withdrawn by the Depositor at any time by the use of the debit card or checks issued to the Depositor for the custodial account The Depositor's interest in the balance in the custodial account is non-forfeitable.
  • Upon the death of the Depositor, all rights, title, and interest in and to the custodial account shall vest in the successor(s) designated on the Application, or if all of them shall predecease the Depositor, then in the Depositor's estate.

ARTICLE III:
The Custodian agrees to submit reports to the Internal Revenue Service and the Account Holder as prescribed by law.

ARTICLE IV:
The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required by law.

  • The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor prescribed by the Internal Revenue Service.

ARTICLE V:
This Agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the HSA Holder and the Custodian whose signatures appear on the Application.

ARTICLE VI:

6.01 Definitions:
In this part of this Agreement (Article VI), the words "you" and "your" mean the Depositor. The Depositor is the person who establishes the Custodial account. The words "we', "us" and 'our" mean the Custodian. The Custodian must be a bank or savings and loan association, as defined in Section 408(n), or other person who has the approval of the IRS to act as Custodian. The word "Code" means the Internal Revenue Code.

6.02 Notices and Change of Address
Any required notice regarding this HSA will be considered effective when we mail it to the last address of the intended recipient which we have in our records or email to the email address noted on our systems. Any notice to be given to us will be considered effective when we actually receive it. You must notify us of any change of address in accordance with the Website Agreement.

6.03 Representations and Responsibilities
You represent and warrant to us that any information you have given or will give us with respect to this Agreement is complete and accurate. Further, you agree that any directions you give us, or action you take will be proper under this Agreement and that we are entitled to rely upon any such information or directions. We shall not be responsible for losses of any kind that may result from your directions to us or your actions or failures to act and you agree to reimburse us for any losses we may incur as a result of such directions, actions or failures to act. We shall not be responsible for any penalties, taxes, judgments or expenses you incur in connection with your HSA. We have no duty to determine whether your contributions or distributions comply with the Code, regulations, rulings or this Agreement.

6.04 Service Fees
We have the right to charge an annual or monthly service fee or other designated fees (for example, a transfer, withdrawal or termination fee) for maintaining your HSA in accordance with the Schedule of Fees . In addition, we have the right to be reimbursed for all reasonable expenses we incur in connection with the administration of your HSA. We may charge you separately for any fees or expenses or we may deduct the amount of the fees or expenses from the assets in your HSA at our discretion. We reserve the right to charge any additional fee upon 30 days notice to you that the fee will be effective.

6.05 Account Type:
Any account type which you select for your HSA shall be subject to any and all restrictions or limitations, direct or indirect, which are imposed by or flow from the bylaws of our organization and all Federal and State laws and regulations which apply to us.

6.06 Beneficiaries
You may designate one or more person or entity as beneficiary of your HSA. This designation can only be made on a form prescribed by us and it will only be effective when it is filed with us during your lifetime. Unless specified otherwise in writing by you, each beneficiary designation you file with us will cancel all previous ones. The consent of a beneficiary shall not be required for you to revoke a beneficiary designation. If you do not designate a beneficiary, your estate will be the beneficiary.

6.07 Notice of Errors
The Depositor agrees to notify the custodian in writing of any errors within 48 hours of becoming aware of such error, but no later than 60 days after receiving any tax report. The Depositor agrees to allow the Custodian ample time to review the depositor's claim and resolve any errors. The Custodian agrees to submit modified reports to the Internal Revenue Service and the Depositor in accordance with the Internal Revenue Service guidelines in the event that an error occurs.

The Custodian reserves the right to refuse to make modifications to an account if an error is not reported within 18 months from the close of the tax year in which the transaction occurred.

6.08 Termination
Either party may terminate this Agreement at any time by giving written notice to the other. We can resign as Custodian at any time effective 30 days after we mail written notice of our resignation to you. Upon receipt of that notice, you must make arrangements to transfer your HSA to another financial organization. If you do not complete a transfer of your HSA within 30 days from the date we mail the notice to you, we have the right to transfer your HSA assets to a successor HSA custodian or trustee that we choose at our sole discretion or we may pay your HSA to you in a single sum. We shall not be liable for any actions or failures to act on the part of any successor custodian or trustee nor for any tax consequences you may incur that result from the transfer or distribution of your assets pursuant to this Section.

If this Agreement is terminated, we may hold back from your HSA a reasonable amount of money that we believe is necessary to cover any one or more of the following:

  • Any fees, expenses or taxes chargeable against your HSA;
  • Any penalties associated with the early withdrawal of any savings instrument or other investment in your HSA.

 If our organization is merged with another organization (or comes under the control of any Federal or State agency) or if our entire organization (or any portion which includes your HSA) is bought by another organization, that organization (or agency) shall automatically become the trustee or custodian of your HSA, but only if it is the type of organization authorized to serve as an HSA trustee or custodian. If we are required to comply with Section 1.401-12(n) of the Treasury Regulations and we fail to do so, or we are not keeping the records, making the returns or sending the statements as are required by forms or regulations, the IRS may, after notifying you, require you to substitute another custodian or trustee.

6.09 Amendments:
We have the right to amend this Agreement at any time. Any amendment we make to comply with the Code and related regulations does not require your consent. You will be deemed to have consented to any other amendment unless, within 30 days from the date we mail the amendment, you notify us in writing that you do not consent.

6.10 Withdrawals
Any withdrawals shall be subject to all applicable tax and other laws and regulations including possible early withdrawal penalties and withholding requirements.

6.11 Transfers From Other Plans
We can receive amounts transferred to this HSA from the custodian or trustee of another HSA. However, we also reserve the right not to accept any transfer.

6.12 Liquidation of Assets
We have the right to liquidate assets in your HSA if necessary to make distributions or to pay fees, expenses or taxes properly chargeable against your HSA. If you fail to direct us as to which assets to liquidate, we will decide in our complete and sole discretion and you agree not to hold us liable for any adverse consequences that result from our decision.

6.13 Restrictions On The Fund
Neither you nor any beneficiary may sell, transfer or pledge any interest in your HSA in any manner whatsoever, except as provided by law or this Agreement.

The assets in your HSA shall not be responsible for the debts, contracts or torts of any person entitled to distributions under this Agreement.

6.14 What Law Applies
This Agreement is subject to all applicable Federal and State laws and regulations. If it is necessary to apply any State law to interpret and administer this Agreement, the law of the State of Delaware shall govern.

If any part of this Agreement is held to be illegal or invalid, the remaining parts shall not be affected. Neither your nor our failure to enforce at any time or for any period of time any of the provisions of this Agreement shall be construed as a waiver of such provisions, or your right or our right thereafter to enforce each and every such provision.

6.15 We work with several parties to provide account services to you. These may include your employer, health insurance carrier or third party administrator. In order that those parties may make deposits to your account on your behalf we may share non-public account information with them as appropriate. Please rest assured that all customer information is kept in the strictest confidence, unless required by law to be disclosed.

If your employer is submitting funding on your behalf, we will disclose to them your account number in order to facilitate deposits into your account.

We shall not be liable to you for any losses, damages, costs, penalties or expenses you incur as a result of your employer's failure to make the contributions to your HSA required under your employer's health plan. We are not responsible for monitoring your employer's contributions to your HSA or notifying you of your employer's contributions. You are responsible for contacting your employer regarding its contributions and monitoring those contributions. We will provide monthly statements to you online.

We shall not be liable to you for any statements, representations, actions or inactions of any insurance agent or agency that sold you an insurance plan in connection with your HSA. The insurance agent or agency is not our partner, agent, affiliate, representative or co-venturer.