One increasingly popular and common approach to health insurance for both individuals and employers is to utilize plans that are HSA-qualified. There are a number of good reasons to consider such a plan, which we’ll be happy to share with you. While their simplicity is attractive to a lot of people, the fact is you really need to take the next step and actually open a Health Savings Account (HSA) and start using it to your advantage. So here are a few essential facts to keep in mind regarding health savings accounts.
- Maximum Contributions. In 2012, the maximum amount you can contribute to an HSA is $3,100 for individuals with self-only coverage and $6,250 for individuals with family coverage. (By the way, you can actually continue making contributions for 2011 until April 15, 2012. The maximum amount you can contribute to an HSA for 2011 is $3,050 for individuals with self-only coverage and $6,150 for individuals with family coverage.)
- Catch-Up Contributions. If you’re 55 or older you can make additional annual contributions to your HSA of $1,000. If both spouses are 55 or older and both are eligible to contribute to an HSA, then both spouses may make a catch-up contribution annually but must open separate HSA accounts (one in each spouse’s name). Each spouse can contribute up to $1,000 to his or her respective account.
- Contributions for Partial Year Coverage. If you drop or lose your HSA-qualified health coverage before the end of the year, you cannot make the full contribution to your HSA. You must pro-rate your contribution for that year, counting only the months you had HSA-qualified coverage on the first day of the month. For example, if you lose your coverage at the end of June, you can only contribute 50% of your allowed contribution for the year.
- Employer Contributions. Attention employers! You can contribute to your employees’ HSAs. These contributions are deductible as a company business expense and are not taxable to the employee. Employers can contribute a set amount or make matching contributions, though matching contributions can only be made if the employer offers a Section 125 cafeteria plan.
To learn more about health savings account or to see how this kind of health insurance plan compares to your current coverage, contact AC Forrest Insurance Group today!