Health Savings Account Contribution Limits

IRS Requirements for 2008

Single Plan

Family Plan

Minimum Deductible

$1,100

$2,200

Maximum Out-of-Pocket

$5,600

$11,200

Contribution Limit

$2,900

$5,800

Catch-Up Contribution (55 or older)*

$900

$900

* If a spouse is also 55 or older, a second HSA must be established and a second contribution of $900 could be made to that account.

IRS Requirements for 2009

Single Plan

Family Plan

Minimum Deductible

$1,150

$2,300

Maximum Out-of-Pocket

$5,800

$11,600

Contribution Limit

$3,000

$5,950

Catch-Up Contribution (55 or older)*

$1,000

$1,000

* If a spouse is also 55 or older, a second HSA must be established and a second contribution of $1,000 could be made to that account.

HSA Exceptions

If an individual does not stay in the HSA-eligible plan 12 months following the last month of the year of the first year of eligibility, the amount which could not have been contributed will be included in income and subject to a 10 percent additional tax.

Example:
You established a qualified health plan in December 2008 and contributed the maximum allowed.  Then in January 2009 you contributed the maximum contribution for that tax year.

Scenario 1:  You maintained coverage through December 31, 2009.  You are eligible for the maximum contribution for both 2008 and 2009.

Scenario 2: You ended coverage April 1, 2009.  Eleven-twelfths of the December 2008 contribution must be treated as income, plus a 10% penalty on that amount must be paid.  Nine-twelfths of the funds deposited in January must be taken out of the account as an excess contribution (and treated as income) but no 10% penalty is incurred.

Are contributions prorated by the number of months the health plan is in place?

Pro-rating of contributions occurs when the status of an HSA changes from family to single, or if the HSA qualified health plan is terminated.

Examples:

Coverage Beginning Mid-year
If you have a new HDHP and coverage begins in July, 2008, you will be eligible to contribute the maximum amount as determined by the IRS ($2,900 for individual coverage and $5,800 for family coverage.)

Health Plan Status Change
If you have family coverage beginning January 1, 2008 and switch to single coverage July 1, 2008, you will be eligible to contribute 6/12 of $5,800 plus 6/12 of $2,900 or $4,350.

HSA Qualified health plan terminated
You have a qualified family health plan January 1, 2008 and terminate coverage  April 1, 2008.  You are eligible to contribute  3/12 of $5,800 or $1,450.

Can I roll over unused funds from an FSA or HRA?

Yes, regulations now allow you to roll over unused funds from an FSA or HRA on a one-time basis.  Please talk to your employer or third-party administrator for specific details.  

Can I transfer funds from an IRA to my HSA?

Yes, regulations allow a one-time rollover from an IRA to an HSA, up to the annual HSA contribution maximum.  Prior to transferring funds, please consult your tax advisor to discuss the benefits and tax reporting requirements.