Published July 2009
With Health Savings Accounts (HSAs), individuals and businesses buy less expensive health insurance policies with high deductibles. Contributions to the accounts are made on a pre-tax basis. The money can accumulate year after year tax free, and be withdrawn tax free to pay for a variety of medical expenses such as doctor visits, prescriptions, chiropractic care and premiums for long-term-care insurance.
Participating employers can also contribute to accounts, on behalf of their employees.
The 2010 limits for individual and family coverage have been announced by the IRS. (IRS Revenue Procedure 2009-29) They are compared with the 2009 limits in the chart below:
|Health Savings Accounts||2009||2010|
|Self-only coverage annual minimum deductible||$ 1,150||$ 1,200|
|Self-only coverage maximum out of pocket||$ 5,800||$ 5,950|
|Self-only coverage maximum HSA contribution||$ 3,000||$ 3,050|
|Family coverage annual minimum deductible (Family coverage can include a spouse and any dependents)||$ 2,300||$ 2,400|
|Family coverage maximum out of pocket||$11,600||$11,900|
|Family coverage maximum HSA contribution||$ 5,950||$ 6,150|
For more information about HSAs, contact your employee benefits and tax advisers.