Health Savings Account (HSA) — Cullen/Frost Bankers, Inc.

The Health Savings Account (HSA) offered by Cullen/Frost Bankers, Inc. is a tax-advantaged savings vehicle designed to help eligible individuals pay for current and future qualified medical expenses. Built for customers who are enrolled in a high-deductible health plan (HDHP), this HSA combines flexible access to funds, potential tax savings, and the opportunity to invest for long-term healthcare needs. The account is structured to be portable, secure, and integrated with modern online and mobile banking tools to make contributions, distributions, and investment management straightforward.

Key Features

• Tax advantages: Contributions are made pre-tax or are tax-deductible, earnings grow tax-free, and qualified withdrawals for eligible medical expenses are tax-free.
• Eligibility: Designed for individuals covered by an HDHP who meet IRS eligibility requirements and are not claimed as a dependent on another person’s tax return.
• Contribution flexibility: Account holders can contribute regularly or make lump-sum deposits, subject to annual IRS contribution limits for individuals and families.
• Investment options: Unused cash balances can be invested in a selection of investment vehicles (mutual funds or similar investment options) to pursue growth over time.
• Portability: The HSA remains with the account holder regardless of employment changes, ensuring continued access to saved funds.
• Debit access and bill pay: Convenient debit card access and online bill payment options allow for quick payment of eligible medical expenses.

Benefits and Advantages

The Cullen/Frost HSA provides multiple advantages that can help individuals and families manage healthcare costs more effectively while also planning for future needs:

• Triple tax benefit: Contributions reduce taxable income, growth is tax-deferred, and qualified medical withdrawals are tax-free.
• Long-term planning: Funds can accumulate year to year without deadline, making the HSA a valuable tool for retirement healthcare planning.
• Control and flexibility: Account holders determine when and how to use funds for qualified expenses, allowing personalized financial management.
• Cost transparency: Integrated digital tools help track contributions, expenses, and investment performance for better budgeting and tax reporting.

Eligibility and Contribution Rules

To open and contribute to an HSA, individuals must meet general IRS eligibility rules: be enrolled in a qualifying HDHP, have no other disqualifying health coverage, not be enrolled in Medicare, and not be claimed as a dependent on someone else’s tax return. Annual contribution limits are determined by the IRS and typically differ for single coverage and family coverage. Catch-up contributions may be available for account holders aged 55 and over.

Qualified Medical Expenses

Qualified medical expenses generally include costs for diagnosis, treatment, prevention, and prescriptions, along with certain dental and vision expenses. Withdrawals used for qualified expenses are tax-free. Withdrawals for non-qualified expenses may be subject to income tax and an additional penalty if made before age 65. Account holders should retain receipts and records to substantiate qualified distributions for tax purposes.

Investing Your HSA Balance

Cullen/Frost provides access to an investment feature allowing account holders to move funds from the HSA cash balance into investment options once a minimum cash threshold is met. Investing HSA funds can help grow savings to cover future healthcare expenses and may be especially useful for those who anticipate minimal medical spending in the near term and want to build a larger tax-advantaged healthcare nest egg. Investment choices, minimums, and performance vary and are subject to market risk; they do not guarantee returns and can lose value.

Fees and Account Management

HSAs may include certain administrative fees, maintenance fees, or fees related to investment activity and transactions. Fee structures vary over time and by account features selected. Cullen/Frost offers online and mobile banking for account access, statements, detailed transaction histories, and tools for tracking qualified expenses. Account holders should review current fee schedules and disclosures to understand applicable charges.

Transfers, Rollovers, and Portability

Funds from other HSAs can typically be transferred or rolled over into a Cullen/Frost HSA, subject to IRS rules and transfer procedures. The account is portable and remains with the individual even if employment status changes. Proper handling of rollovers and transfers helps preserve tax advantages and avoid penalties.

Security and Protection

Cullen/Frost Bankers, Inc. employs industry-standard security measures for online and mobile access, including encryption, multi-factor authentication options, and secure account monitoring. HSA cash balances held at FDIC-insured institutions are subject to applicable deposit insurance limits; investment portions are not FDIC insured and carry investment risk. Account holders should use account alerts and review statements regularly to detect unauthorized activity.

How to Open and Manage an HSA

Opening an HSA typically requires documentation of HDHP coverage and personal identification. Account setup can include linking external accounts for contributions, electing electronic statements, and selecting investment preferences. Regular contributions can be automated, and account holders can use the HSA to pay eligible medical bills directly or reimburse themselves for qualified expenses paid out of pocket.

Best Practices and Planning Tips

• Contribute early and consistently to maximize tax-advantaged growth and build a healthcare savings buffer.
• Keep detailed receipts and documentation for all distributions to support tax-free withdrawals for qualified expenses.
• Consider investing portions of the HSA balance for long-term growth if you do not expect near-term medical spending.
• Coordinate HSA use with other tax and retirement strategies to optimize overall financial planning.

Important Considerations

HSAs involve tax rules and eligibility requirements governed by federal regulations. Contribution limits, qualified expenses, and other rules can change annually. Individuals should review the latest guidance and consider consulting a tax or financial advisor for personalized advice. This HSA product is intended to provide flexible, tax-advantaged healthcare savings with tools for both immediate expense management and long-term planning.

Product descriptions and terms are subject to change. Account holders should review current disclosures and account agreements for full details.

Address Bank: Frost Tower, San Antonio, Texas
Bank: Cullen/Frost Bankers, Inc.
Headquarters: San Antonio
Products: Retirement & Health
Type: Health Savings Account (HSA)