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HSA Contribution Rules

A health savings account can provide important benefits in the form of lower taxes and more predictable health care costs. When you combine a high-deductible health plan with a health savings account, you can enjoy lower insurance premiums and protect yourself against those potential out-of-pocket costs.

  1. High-Deductible Health Plan

    • The IRS limits HSA eligibility to those covered by high-deductible health plans. In order to quality as an HDHP, the plan must carry a deductible of at least $1,200 for individual coverage. For family coverage that minimum deductible amount is $2,400. If you buy your health coverage on the individual market, be sure to tell your broker that you need a plan that is HSA-eligible. If you get your health insurance through your employer, your benefits officer can help you find an appropriate plan.

    Contribution Limits

    • The IRS sets the contribution limits for health savings accounts, and the tax agency reviews those limits each year. For 2011, you can contribute up to $3,050 to your health savings account if it covers only you. If your HSA covers your entire family, you can contribute up to $6,150. Those 55 years of age and older can contribute an additional $1,000 to their health savings accounts. This extra $1,000 applies to both individual and family HSA plans.

    Employer Contributions

    • Your employer can contribute to your HSA, and many employers encourage workers to enroll in high-deductible plans by partially funding their linked heath savings accounts. But if your employer does contribute to your HSA, your own contributions are limited to the difference between what the employer puts in and the contribution limits set by the IRS. For instance, if your employer funds $1,000 of your individual HSA, you can only contribute another $2,050 to the plan.

    Rollover

    • One of the advantages of a health savings account is that the money rolls over from one year to the next. If you have money left over in your HSA at the end of the year, that money remains in your account when January rolls around. On Jan. 1, you can contribute additional money to the HSA, up to the current contribution limits set by the IRS.

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