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Is There a Limit That a Single Person Can Contribute to an HSA Account?

A health savings account (HSA) is designed to help you pay for medical costs not covered by your insurance. The idea behind a health savings account is that consumers spend more wisely and make smarter health care decisions when they spend their own money. The IRS provides a tax break for those who open an HSA, and you can save money on health care premiums by combining the HSA with a high deductible health plan.

  1. 2010 Limits

    • For the 2010 tax year, the HSA contribution limit for a single person is $3,050. That amount applies to the sum total of contributions from all sources. Your employer can contribute to your HSA account, as can family members and friends. No matter who contributes to your HSA, the most you can put into a single HSA plan for 2010 is $3,050. If you are 55 or older, you can contribute an extra $1,000 to the plan. The IRS reviews these contribution limits each year and changes them based on a specific formula, so always check with your tax expert or accountant before making an HSA contribution.

    Eligibility

    • Before you can open or contribute to an HSA, you must first have a high deductible health plan (HDHP) in place. Not all health insurance plans qualify, so check with your employer or your insurance broker to make sure your current plan is considered an HDHP. If you open an HSA and turn out not to be eligible, you could face tax penalties from the IRS.

    Using Your HSA

    • Once the HSA is open, you can use the funds to pay for medical and health care expenses not covered by your health care plan. These expenses can include the amount of your deductible, as well as any copayments on prescription drugs and doctor visits. When you visit the doctor, you can use your HSA debit card to pay the cost of your copay. You can do the same when you pick up your prescriptions at the drug store.

    Record Keeping

    • It is a good idea to keep a record of the money you spend from your HSA account. Your plan administrator should provide you with a debit card you can use to make purchases and pay expenses related to your health care. Keep a copy of each HSA debit card receipt in a special envelope then use those receipts to reconcile your HSA account when you receive your statement. Keep copies of all HSA receipts in case there is a question about the legitimacy of a particular purchase in the future.

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