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Employees Health Savings Account

Putting money into a health savings account is an excellent way to prepare for the high cost of health care and health insurance. When you combine a high-deductible health plan with a health savings account, you can enjoy lower premiums while protecting yourself from the cost of that increased deductible.

  1. High-Deductible Health Plan

    • Before you can invest any money in a health savings account, you must first have a high-deductible health plan (HDHP) in place. To be considered an HDHP, the insurance package must have a deductible of at least $1,200 for individual coverage or $2,400 for a family plan, as of 2011. You can check with your employer to see whether or not your plan qualifies as an HDHP and is eligible for a health savings account.

    Employer Contributions

    • If your employer offers an HDHP as part of its benefits package, the employer might make a contribution to a health savings account on your behalf if you agree to sign up for that plan. The amount the employer puts in will vary from company to company, and it is important to read the plan literature carefully to see how much you can expect in your account.

    Contribution Limits

    • The contribution limits for health savings accounts are reviewed each year and adjusted as necessary, so you should always check the current rules before you put any money into your health savings account. For 2011, you can put up to $3,050 into a health savings account that covers only yourself. If you have a health savings account that covers your entire family, you can put up to $6,050 into the account. If you are 55 years of age or older, you can contribute an extra $1,000 into either a family or individual health savings account.

    No Expiration

    • Unlike flexible spending accounts, where the money is forfeited if not spent by the end of the year, the money you, or your employer, put into a health savings account does not expire. If you have money left over at the end of the year, that money simply rolls over into the next year. That allows you to build up a significant amount of money in your health savings account over time.

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