When you have a health savings account you’re allowed to make contributions to the health savings account that are deductible from your income. There are limits to the amount that is deductible each year, and these limits are set by the IRS. In order to have a HSA, you must also have a High-Deductible Health Plan (HDHP), which is a health insurance policy that, as the name implies, has a high deductible. Qualified plans have a minimum deductible of $2,600 for families (for 2017) or $1,300 for singles. In addition, HDHPs have a maximum annual limit on the sum of the deductible and out-of-pocket expenses that you must pay. Out-of-pocket expenses include co-payments and other amounts, but do not include premiums paid. The maximum sum of deductibles and out-of-pocket payments for a qualified HDHP in 2017 is $13,100 for family coverage, or $6,550 for single filers. These figures have not […]
high deductible health plan
HSA Funding
As many of our blog posts do, today’s post originates from a question from one of our readers regarding funding an HSA. The question had to do with the tax treatment of contributions to the HSA and whether said contributions are free from FICA tax. In order to have an HSA the employer/employee must be participating in a high deductible health plan (HDHP). HDHP plans must meet a minimum deductible of $1,300 for single individual plans and $2,600 for family plans. In addition, the maximum contribution for an HSA is $3,350 for an individual plan and $6,750 for a family plan. For those age 55 and older, the plans allow an additional $1,000 catch-up contribution. Generally, employers making contributions to the employees’ HSA avoid paying FICA and FUTA taxes and are also allowed a corresponding tax deduction for providing the employee benefit. Employees making contributions to their own HSA through […]
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A Consequence of the Affordable Care Act
As much as I wanted to put the word unintended before consequence in my title, I had a hard time believing that what I’m about to write about was unintended. As many of you are aware, the Affordable Care Act a.k.a. “Obamacare” is the law passed that requires, among other things, that everyone carry health insurance, subject to some specific exclusions. What I want to talk about is how this affected my insurance specifically and likely affected the insurance of many others. Before the Act was passed my family and I enjoyed health insurance through our HSA. A health savings account allows a person or family to have a high deductible health insurance plan while also making tax deductible contributions to an account that can amass funds for medical expenses. Funds from the account that pay for qualified medical expenses are tax free. Self-employed individuals can also deduct their health […]
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Who Will Be The Biggest Benefactors of Obamacare?
According to data cited in a recent WSJ article (The Health-Care Overhaul: What You Need to Know), there is a specific demographic that should benefit the most from the up-coming institution of the Affordable Care Act’s changes to the healthcare system. If you’re wondering why this writing seems a bit smug, it’s because I’m one of these projected benefactors: folks between age 50 and 64. Why is this group deemed the most likely to benefit? It has to do with some current realities about our nation’s health and the way that the (current and proposed) health insurance marketplace works. First of all, folks in this age group who are not covered by an employer plan, or are not covered by Medicaid, must find insurance in the private marketplace. And the reality is that folks who’ve seen half a century of life or more are typically in poorer health than younger […]
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Health Savings Account Limits for 2013 Published
The IRS recently distributed information about the adjustments to Health Savings Accounts (HSAs) for 2013. These limits adjust annually based upon inflation calculations (if inflation is present). For 2013, the annual contribution limit for self-only coverage is $3,250, which is an increase of $150 over the figure for 2012. For an individual with family coverage, the limit in 2013 is increased by $200 to $6,450. The deductibles for HSA accounts are also increased in 2013: $1,250 for self-only coverage, and $2,500 for family coverage. This is an increase of $50 and $100 for each deductible, respectively. Lastly, the out-of-pocket expense limit for self-only coverage is $6,250 in 2013, an increase of $200. Family coverage out-of-pocket maximum is $12,500 (up from $12,100 in 2012). This limit is for deductibles, co-payments, and other amounts, but not premiums.
Sterling Raskie, MSFS, CFP®, ChFC®
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