For many of you, the term H.S.A. is familiar, but there are still many who are confused as to what exactly a Health Savings Account is! We would like to provide you with some basic information.
For our clients who already have implemented HSAs, here are the new 2019 IRS guidelines:
New Annual Contribution Levels for HSAs:
- The maximum annual HSA contribution for an eligible individual with self-only coverage is $3500
- For family coverage, the maximum annual HSA contribution is $7000
- Catch up contribution for individuals who are 55 or older is $1,000 for 2019 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
In a nutshell, an H.S.A. is a different (and relatively new) way to purchase insurance and fund your healthcare expenses. You purchase a high deductible health insurance plan (HDHP) to protect yourself against catastrophic loss. In conjunction with the HDHP, you are eligible to set up a pre-tax savings account to save money to pay for routine medical expenses or future medical expenses. In doing this, you should be able to save money on health insurance premiums while building reserves for future medical expenses.
For those of you who would like more information on HSAs, Benefits By Design would be happy to help! Please call us to set up a time to discuss. 480-831-7700