$5,600 - self only coverage
$11,200 - 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.
You can make a contribution to your HSA each year that you are eligible:$2,900 - self only coverage$5,800 - family coverage
Individuals age 55 and older can also make additional "catch-up" contributions. The maximum annual catchup contribution is as follows:
2008 - $900
2009 and after - $1,000
Determining Your Contribution
Your eligibility to contribute to an HSA for each month is generally determined by the effective date of your HDHP coverage. If you do not have HDHP coverage for the entire year; you will not be able to make the maximum contribution. All contributions (including catch-up contributions) must be pro-rated. Your annual contribution depends on the number of months of HDHP coverage you have during the year (count only the months where you have HDHP coverage on the first day of the month).
Contributions can be made as late as April 15 of the following year.
Using Your HSA
You can use the money in the account to pay for "qualified medical expenses" permitted under federal tax law. This includes most medical care and services, and dental and vision care, and also includes over-the-counter drugs such as aspirin.
You generally can not use the money to pay for medical insurance premiums, for any of the following:
- any health plan coverage while receiving federal or state unemployment benefits
- Cobra continuation coverage after leaving employment with a company that offers health insurance coverage
- qualified long-term care insurance
- Medicare premiums and out-of-pocket expenses, including deductibles, co-pays, and coinsurance for:
Part A (hospital and inpatient services)
Part B (physician and outpatient services)
Part C (Medicare HMO and PPO plans)
Part D (prescription drugs)
You can use the money in the account to pay for medical expenses of yourself, your spouse, or your dependent children. You can pay for expenses of your spouse and dependent children even if they are not covered by your HDHP.
Any amounts used for purposes other than to pay for "qualified medical expenses" are taxable as income and subject to an additional 10% tax penalty. Examples include:
- Medical expenses that are not considered "qualified medical expenses" under federal tax law (i.e.: cosmetic surgery)
- Other types of health insurance unless specifically described above
- Medicare supplement insurance premiums
- Expenses that are not medical or health related
After you turn age 65, or become disabled, the 10% additional tax penalty no longer applies.
What Happens to My HSA When I Die?
If you are married, your spouse becomes the owner of the account and can use it as if it were their own HSA. If you are not married, the account will no longer by treated as an HSA upon your death. The account will pass to your beneficiary or become part of your estate (and be subject to any applicable taxes).
Opening your Health Savings Account
Banks, credit unions, insurance companies, and other financial institutions are permitted to be trustees or custodians of these accounts. Other financial institutions that handle IRAs or Archer MSAs are also automatically qualified to establish HSAs. If you cannot locate a local institution willing to establish your account, check links under "Resources" on the Treasury website.
Health Savings Accounts, Qualified Expenses
The following lists provide a brief summary of the information described in the Internal Revenue Code and IRS publication. The lists are intended to serve as a quick reference to help determine whether or not an expense may be eligible for HSA reimbursement. This information is provided with the understanding that the Tomei Agency is not providing tax advice. Tax advice should be obtained from a professional tax advisor.
Listed below are qualified medical expenses eligible for reimbursement:
Autoette (when used for relief of sickness and disability)
Birth Control Pills (by prescription)
Christian Science Practitioner
Convalescent Home (for medical treatment only)
Drug Addiction Therapy
FICA and FUTA (tax paid for medical care service)
Hearing Aid and Batteries
Lead Paint Removal
Legal Fees (to authorize treatment for a mental illness)
Lodging (away from home for outpatient care)
Nursing (including board and meals)
Operating Room Costs
Organ Transplant (including donor's expenses)
Over the Counter Medication (OTC)
Oxygen and Oxygen Equipment
Practical Nurse (for medical services)
Premiums (for long-term care insurance)
Premiums (for continuation coverage required by Federal Law (Cobra))
Premiums (for insurance received while receiving unemployment compensation)
Special School Costs (for the handicapped/challenged)
Spinal Fluid Test
Telephone or TV Equipment (to assist the hearing impaired)
Transportation Expenses (relative to health care)
Ultra-violet Ray Treatment
Vitamins (if prescribed)