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Health Savings Accounts (HSA) Contribution Limitations

Source: US Treasury Department

HSA Contributions

You can make a contribution to your HSA each year that you are eligible. For 2009, you can contribute up to $3,000* if you have Self-only coverage and $5,950* if you have Family coverage

Catch-Up Contributions

Individuals age 55 and older can also make additional “catch-up” contributions. The maximum annual catch-up contribution for 2009 and after is $1,000

Determining Your Contribution

Your eligibility to contribute to an HSA for each month is generally determined by the whether you have High Deductable Health Plan (HDHP) coverage on the first day of the month. Your maximum contribution for the year is the greater of: (1) the full contribution, or (2) the pro rated amount. The full contribution is the maximum annual contribution for the type of coverage you have on December 1. The pro rated amount is 1/12 of the maximum annual contribution for the type of HDHP coverage you have times the number of months you have that type of coverage. If your contribution is greater than the pro rated amount, and you fail to remain covered by an HDHP for the entire following year, the extra contribution above the pro rated amount is included in income and subject to an additional 10 percent tax.

Examples:

If you first have family HDHP coverage on July 1, 2009, and keep HDHP coverage through December 31, 2009, you are allowed the full $5,950 family contribution to an HSA for 2009. If you fail to remain covered by an HDHP for all of 20109, $2,975 would be included income and subject to an additional 10 percent tax.

If you have family HDHP coverage from January 1, 2009 until June 30, 2009, then cease having HDHP coverage, you are allowed an HSA contribution of 6/12 of $5,950, or $2,975 for 2009.

If you have family HDHP coverage from January 1 2009 until June 30, 2009, and have self-only HDHP coverage from July 1, 2009 to December 31, 2009, you are allowed an HSA contribution of 6/12 x $5,950 plus 6/12 of $3,000, or $4,475 for 2009.

Contributions can be made as late as April 15 of the following year.

High Deductible Health Plans (HDHPs)

You must have coverage under an HSA-qualified “high deductible health plan” (HDHP) to open and contribute to an HSA. Generally, this is health insurance that does not cover first dollar medical expenses. Federal law requires that the health insurance deductible be at least:

  • $1,150* -- Self-only coverage
  • $2,300* -- Family coverage

In addition, annual out-of-pocket expenses under the plan (including deductibles, co-pays, and co-insurance) cannot exceed:

  • $5,800* -- Self-only coverage
  • $11,600* -- Family coverage

In general, the deductible must apply to all medical expenses (including prescriptions) covered by the plan. However, plans can pay for “preventive care” services on a first-dollar basis (with or without a co-pay). "Preventive care" can include routine pre-natal and well-child care, child and adult immunizations, annual physicals, mammograms, pap smears, etc.

Need More Information about HSAs?

The Treasury Department’s web site has additional information about Health Savings Accounts, including answers to frequently asked questions, related IRS forms and publications, technical guidance, and links to other helpful web sites. The website can be found through www.treas.gov (click on “Health Savings Accounts”) or directly at the following address: http://www.treas.gov/offices/public-affairs/hsa/.

To talk to a First National Bank ~ Fox Valley personal banker about our HSA solution, please call 920.729.6900 or 920.426.6222.

*2009 amounts; adjusted annually for inflation.