|
g g 2010 Contribution Limits, Deductibles & Out-of-Pocket Expenses HSA Holders can save up to $3,050 for those with qualifying individual coverage and $6,150 for those with qualifying family coverage (HSA Holders age 55 and older can save an extra $1,000) | Eligible contributions are 100% tax deductible from gross income | Minimum annual deductibles are $1,200 for self-only coverage or $2,400 for family coverage | Annual out of pocket expenses cannot exceed $5,950 for self-only coverage and $11,900 for family coverage |
What Exactly is a Health Savings Account (HSA)? Health Savings Accounts (HSAs) were created by the Medicare bill signed by President Bush on December 8, 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. Who Is Eligible to Have an HSA?Any adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA. Tax-advantaged contributions can be made in three ways: - the individual or family can make tax deductible contributions to the HSA even if they do not itemize deductions;
- the individual’s employer can make contributions that are not taxed to either the employer or the employee; and,
- employers sponsoring cafeteria plans can allow employees to contribute untaxed salary through salary reduction.
What If I Am Age 55 or Older?To encourage saving for health expenses after retirement, individuals age 55 and older are allowed to make additional catch-up contributions to their HSAs. Once an individual enrolls in Medicare they are no longer eligible to contribute to their HSA. What's the Difference Between an HSA and a Flexible Spending Arrangement (aka "Flex Account"):Funds distributed from the HSA are not taxed if they are used to pay qualified medical expenses. Unlike amounts in Flexible Spending Arrangements that are forfeited if not used by the end of the year, unused funds remain available for use in later years. What is a High Deductible Health Plan (HDHP)?An HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses (i.e., your “deductible”) but will generally cover you after that. What are the Primary Benefits of an HSA?- Lower insurance premiums by selecting an HDHP
- Contributions are deductible or tax free
- Qualified distributions are tax free
- Balance carries over from year to year; no "use it or lose it" policy
- No income limits, and no compensation required
- You can have an HSA in addition to an IRA, Roth or a 401(k)
- Use for medical expenses or other purposes
- PROTECT YOUR HEALTH & YOUR SAVINGS!
|
