Health Savings Account—Frequently Asked Questions
Q. What is a high-deductible health plan (HDHP)?
A. Essentially, the HSA-qualified high-deductible health plan* is health insurance that does not cover first-dollar medical expenses. The deductible must apply to all medical costs covered by the plan, and the HDHP must have:
- A minimum deductible of $1,200** for individual coverage and $2,400** for family coverage
- A maximum out-of-pocket limit (including deductibles and co-pays) of $5,950** for individuals and $11,900** for families
*Other criteria apply. Check with you insurance provider or tax advisor to ensure that the HDHP is HSA-qualified.
**Amounts for 2010. Adjusted annually for inflation.
Q. What happens when I spend my HSA money on non-qualified expenses?
A. HSA funds used for anything other than "qualified medical expenses" are taxable as income and subject to an additional 10% tax penalty. After you turn age 65, or if you become disabled, the 10% additional tax penalty no longer applies. Please consult a tax professional.
Q. What medical expenses qualify?
A. Qualified medical expenses include:
- Most medical care and services
- Prescriptions and over-the-counter drugs, such as aspirin
- Dental and vision costs, even if they are not covered by your insurance plan
- Healthcare coverage during periods of unemployment
- Qualified long-term care insurance
Q. Who can contribute, when, and how much?
A. You or any other person, including an employer or a family member, can make HSA contributions on your behalf by the tax-filing deadline. Money can be deposited into the account each year that you are eligible, up to the amount specified by law. Maximum HSA annual contribution limits are as follows:
| |
2011 |
2010 |
|
Individual Coverage
|
$3,050 |
$3,050 |
|
Family Coverage
|
$6,150 |
$6,150 |
Individuals age 55 and older can make additional "catch-up" contributions,
with annual maximums as follows:
Visit the U.S. Department of Treasury for more information on the Health Savings Account.
