The New Year brings with it new opportunities to save money tax-free in a Health Savings Account (HSA) to be used to pay for medical expenses or to store up for retirement.
Back in May the Treasury Department and Internal Revenue Service issued new guidance on the 2009 maximum contribution levels for HSAs and out-of-pocket spending limits for the High Deductible Health Plans (HDHPs) that are required in order to qualify to open and/or fund HSAs.
According to the Treasury, the new levels are as follows:
New Annual Contribution Levels for HSAs:
- For 2009, the maximum annual HSA contribution for an eligible individual with self-only coverage is $3,000.
- For family coverage, the maximum annual HSA contribution is $5,950.
- Catch up contribution for individual who are 55 or older is increased by statute to $1,000 for 2009 and all years going forward.
- Individuals who are eligible individuals on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch up contribution, if 55 or older by year end), regardless of the number of months the individual was an eligible individual in the year. For individuals who are no longer eligible individuals on that date, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.
This means that those with qualifying single coverage can save $150 more in 2009 than they could in 2008. Anyone with family coverage can put away an additional $300 this year. If you are 55, or older, you can maka catch up contribution in 2009 of $1,000.
New Amounts for Out-of-Pocket Spending on HSA-Compatible HDHPs:
- For 2009, the maximum annual out-of-pocket amounts for HDHP self-coverage increase to $5,800 and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,600.
Minimum Deductible Amounts for HSA-Compatible HDHPs:
- For 2009, the minimum deductible for HDHPs increases to $1,150 for self-only coverage and $2,300 for family coverage.
Remember, check with your tax advisor for more information, or consult the Treasury/IRS announcement by going to http://www.treasury.gov/press/releases/hp975.htm.