Created to help give more control over healthcare costs to consumers, Health Savings Accounts (HSAs) are tax-advantaged accounts that allow individuals to accumulate funds to pay for current and/or future medical expenses. Contributions into the HSA grow tax-free and are not taxed when used to pay for qualified medical expenses.
An HSA must be combined with a High Deductible Health Plan (HDHP), which is intended to cover serious illness or injury once the deductible has been met. The HSA is used to cover small and routine medical expenses until the deductible is met. The funds in an HSA move with you if you change jobs, and your money rolls over every year – there is no “use it or lose it” requirement.
Maximum contribution for individual health plans
$2,900, regardless of deductible
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 as income and subject to a 10% additional tax.
Maximum contribution for family health plans
$5,800, regardless of deductible
Same rules apply as for individual plans
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.
Catch-up contribution
$900, for individuals 55 or older
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.
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.
Ziegler offers a Health Savings Account to suit your needs. Contact your financial advisor or our Client Service Center at 888.884.8339 to discuss your needs and learn about the solutions your financial advisor has to offer to help fund your future healthcare needs.