Individual/Family Health Insurance Article

Maximum HSA Contribution

HSA Maximum Contributions Typically Increase Each Year

If you have an HSA (Health Savings Account) and an HDHP (High Deductible Health Plan), you need to be aware that the maximum HSA contribution increases every year as the cost of living increases. Because of this, the plan is ideal as a way to save money on your health care insurance. If you don’t have an HSA and HDHP, it may be a good idea to consider this often overlooked option for your health care coverage. For example, if you live in Missouri and were to purchase an Anthem Lumenos HSA Missouri plan, this is an explanation of benefits and coverage.

If you wish to use an HSA, you must elect a qualified HDHP.  The HSA - HDHP combination allows you to control how you spend your health care dollars.  Also, when you use the HSA savings account with a high deductible health plan, any money growing tax-free in your account that you did not use in the current year can simply roll over into the next year, allowing you to grow a substantial sum over time.

2009 Maximum Contribution

The maximum HSA contribution for individual plans for the year 2009 was $3,000. However, if you’re over the age of 55, you can tuck away an additional $1,000. The maximum HSA contribution for family coverage was $5,950. You don’t have to be part of the plan all year in order to get the benefit of the tax-deductible health plan. If you start a plan as late as the first day of the last month of the taxable year, you can take the maximum HSA contribution for the year.

2010 Maximum Contribution

The maximum contribution that can be made to an HSA in 2010 for individuals is $3,050, up from $3,000 in 2009. The maximum HSA contribution for those with family coverage rose to $6,150 from $5,950.

Out of Pocket Maximum

The maximum out-of-pocket expense, including deductibles, that HSA subscribers can be required to pay in 2010 is $5,950 for single coverage, up from $5,800 in 2009 and $11,900 for family coverage, up from $11,600.

Minimum Deductible

The minimum deductible for the high-deductible health insurance plan to which HSAs must be linked has increased in 2010 to $1,200 for individual coverage and $2,400 for family coverage. These figures are up from $1,150 for individual coverage and $2,300 for family coverage in 2009.

HSA Pro and Cons

On the con side, the high deductible insurance plan may seem at first as though you don’t have insurance at all because you keep paying bills until you meet your deductible.  But on the pro side, remember that the money you put into the health savings account should cover the deductible amount, and that money is not taxed. Plus, as mentioned previously, if you don’t use it, you keep it and it continues to grow for your future use. The more you accumulate, the less you worry about an out-of-pocket amount for any type of medical need. The really big pro here is that if you or a family member develops a catastrophic illness, you let the insurance company bear the risk and burden of the higher bills you accrue.

Rules for HSA Spending

Just like any plan that offers you the ability to grow dollars on a tax-free basis, there are rules. If you remove the money from your health savings account for any expense that’s not health related; you pay a penalty to the IRS.  The really good news is that the health savings account rules allow you to use it for a variety of different health-related expenses—not just what a typical insurance plan would cover. For example, if you wish to use the money in the HSA savings account for dental procedures, something your health insurance typically wouldn’t pay, you have the option to use it without penalty for that purpose. Have a look at our list of qualified expenses to get an idea of what you can use your HSA to pay for. 

The HSA is a Flexible Health Insurance Tool

The HSA account is extremely flexible and really puts you at the helm when it comes to spending health care dollars. And each year as the maximum HSA contribution increases, it adds more benefit to those savvy consumers that select the health savings account and high deductible health plan as their form of insurance protection.