Cargill recently announced a unique program that helps farmers build a tax-free fund for paying medical expenses not covered by insurance. The new program called Harvest Health involves a health savings account (HSA) managed by Wells Fargo with funding put into the account by Cargill in exchange for grain commitments. Based on the amount of grain committed, Cargill will deposit money into an HSA above what the farmer receives for the grain. The farmer may use the money in the account for medical expenses not covered by insurance, including expenses for eye care, dental care, prescriptions and office visits.

“We have been receiving feedback from farmer customers that the cost of health-care insurance is in some cases a crippling burden,” reports Mark Tracy, assistant vice president, Cargill AgHorizons. So Tracy and others at Cargill sought creative solutions to offer a “helping hand” to farmers.

To qualify for the Harvest Health HSA, farmers must have a high-deductible medical insurance policy with a minimum deductible of $1,050 for an individual and $2,100 for a family. Farmers can contribute to their HSAs, and the contributions are tax deductible. Federal rules limit annual contributions to $2,700 for an individual and $5,450 for a family.

If farmers participate in Harvest Health, Cargill will contribute to the fund based on the grain commitment for corn, soybeans or wheat and pricing that a farmer sets with a Cargill representative. For example, Tracy says it will take a commitment of 11,000 bu. of corn priced at $2.60 on September 20 to fund $1,000 into the account. At this same price, it will take about 55,000 bu. of corn to hit the contribution limit of $5,450. Farmers will still receive full payment for the grain.

If a farmer does not use the money, it stays in the account and continues to grow tax free. Meanwhile, the farmer (or Cargill) can continue to make annual contributions to the account. At age 65, a farmer may withdraw the money without penalty for uses other than medical expenses. Normal income tax is paid on the amount withdrawn.

Farmers interested in the Harvest Health program may contact any AgHorizons elevator or visit www.cargillHSA.com. Farmers who want to find a high-deductible health insurance plan may visit www.ehealthinsurance.com/Cargill or call 800/977-8860. More HSA information is available at www.treas.gov/offices/public-affairs/hsa.