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Health Savings Account
Click for Frequently
Asked Questions
Treasury and IRS Issue Indexed Amounts
for Health Savings Accounts
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The
Treasury Department and IRS recently updated
the following out-of-pocket and maximum
contribution levels for 2005:
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2005 |
2006 |
2007 |
| Individual out-of-pocket maximums. |
$5,100** |
$5,250** |
$5,500** |
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Family out-of-pocket
maximums.
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10,200** |
$10,500** |
$11,000** |
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Individual Maximum
Contributions.
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2,650 |
$2,700** |
$2,850** |
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Family Maximum
Contribution.
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5,250 |
$5,450** |
$5,650** |
| Catch Up
Contribution for those over age 55.
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600 |
700 |
800 |
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For
More Info, Visit HSA
Bank
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The Treasury
Department and IRS today issued new guidance on the
maximum contribution levels for Health Savings Accounts
(HSAs) and out-of-pocket spending limits for High
Deductible Health Plans (HDHPs) that must be used in
conjunction with HSAs. These amounts have been indexed for
cost-of-living adjustments for 2005 and are included in
Revenue Procedure 2004-71, which announces changes in
several indexed amounts for purposes of the federal income
tax. The minimum deductible required for HDHPs did not
change.
"Today's guidance will help consumers and employers who
wish to participate in HSAs in 2005 to plan accordingly,"
said Treasury's Acting Assistant Secretary for Tax Policy
Greg Jenner. "Knowing the dollar limits for these
accounts, and for the high deductible insurance that goes
with them, is critical for those who want to get the
maximum benefit out of this revolutionary health care
coverage option . one that puts health care spending
decisions back in the hands of individuals."
The new levels are as follows:
New Annual Contribution Levels for
HSAs:
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For 2005, the maximum annual HSA
contribution for an eligible individual with self-only
coverage is $2650. (Note: for any individual, the
maximum contribution is the lesser of the indexed amount
or the deductible of the HDHP.)
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For family coverage the maximum
annual HSA contribution is $5250.
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Catch up contributions for
individuals who are 55 or older is increased by statute
from $500 to $600 for 2005.
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Both the HSA contribution
and catch up contribution apply pro rata based on the
number of the months of the year a taxpayer is an
eligible individual, and, with respect to the catch up
contribution, the number of months of the year that the
taxpayer is age 55 and over.
New Amounts for Out-of-Pocket
Spending on HSA-Compatible HDHPs:
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The maximum annual
out-of-pocket amount for HDHP self-coverage increases to
$5,100 and the maximum annual out-of-pocket amount for
HDHP family coverage is twice that, $10,200.
Minimum Deductible Amounts for
HSA-Compatible HDHPs:
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For 2005, the minimum deductible
for HDHP is unchanged, remaining at $1,000 for self-only
coverage and $2,000 for family coverage.
Please follow this link to the
Department of Treasury's website for the full
guidance: https://www.ustreas.gov/press/releases/reports/111904revproc200471.pdf
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