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IRS Limits for Family HSA Plans

The health savings account is a type of tax-advantaged account that you can use to pay for qualified medical expenses. With this type of account, you can use money that you have not paid taxes on to pay for your family's out-of-pocket medical costs. If you choose to utilize this type of account, you will have to abide by the rules of the Internal Revenue Service.

  1. Annual Contribution Limits

    • With this type of plan, the IRS sets a limit on how much you can contribute each year. Individual accounts have a specific limit and family accounts have a separate limit. As of 2011, the annual contribution limit for a family plan is $6,150. This contribution is made with pre-tax dollars, which means that your annual income will be reduced by the $6,150 if you choose to make the full contribution for the year.

    Catch-Up Contributions

    • If you are over the age of 55, you can also be eligible to make an additional contribution known as a catch-up contribution. To be eligible to make this contribution, you cannot be currently enrolled in Medicare or a Medicare Advantage plan. If you are eligible to make a contribution, this allows you to set aside an extra $1,000 per year toward your health savings account. This brings the total family plan limit up to $7,150 for the year.

    Deductible Requirements

    • To be eligible for a health savings account, you have to have a health insurance plan that has a high deductible. The IRS sets the rules for how high your deductible has to be each year to qualify for this type of account. As of 2011, the IRS sets a minimum deductible amount of $2,400 for a family plan in order to qualify for a health savings account. If you are an individual, the number is $1,200.

    Accumulation

    • A health savings account is similar to the flexible spending account that is offered by employers as part of a benefits package. One of the key differences with the health savings account is that you can accumulate the money that you contribute over the years. The money that you put into the health savings account does not disappear after a year. It keeps accumulating and growing and then you can eventually use the money once you turn 65 for non-medical expenses if you choose.

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