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HSA Account Limits

A health savings account, HSA, can be a good way to deal with the high cost of medical care. With an HSA you can put money aside on a pre-tax basis and use those funds to pay for your health care costs. But before you open a new HSA or contribute to an existing one, it is important to understand all the rules and the limitations.

  1. Contribution Limits

    • The IRS reviews the contribution limits for health savings accounts every year and adjusts those limits as it sees fit. For 2011, the most you can contribute to a single HSA is $3,050. If you have a health savings accounts that covers your entire family, you can contribute up to $6,150. Those 55 and older can contribute an extra $1,000 to their HSA plans.

    Minimum Deductibe

    • To qualify for a health savings account, you must first have a high-deductible health plan in place. Not every plan qualifies as an HDHP, and to qualify the plan must have a minimum deductible of $1,200 for an individual plan or $2,400 for a family HSA.

    Out-of-pocket Limits

    • The IRS sets limits on the amount of out-of-pocket expenses you can be charged while participating in a high-deductible health plan. For 2011, that limit is $5,950 for a single health plan and $11,900 for a plan that covers your entire family. It is important to check with your benefits manager or health insurance broker to make sure your plan falls within the guidelines established for high deductible health plans.

    Spending Limits

    • As of January 1, 2011, health savings accounts have new limits on over-the-counter medications. As of that date, the funds in an HSA can no longer be used to purchase over-the-counter medications like cold remedies and allergy pills, unless the buyer has a prescription from a doctor. This restriction was enacted as part of the health care reform legislation passed in 2010.

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