Health Savings Account limits for 2013

The Internal Revenue Service announced the new HSA contribution limits for 2013.

The HSA contribution limits for 2013 will be:

  • Individuals – $3,250*
  • Families – $6,45o*

*A participant over 55 years of age is allowed to contribute an additional $1,000.

In order to contribute to an HSA, you must have a qualified High Deductible Health Plan, also known as HDHP. The current definition of a qualified HDHP for 2013 (unchanged from 2012) is:

Individuals – High Deductible Health Plan

  • Minimum Deductible – $1,200
  • Maximum Out of Pocket – $5,950

Families – High Deductible Health Plan

  • Minimum Deductible – $2,400
  • Maximum Out of Pocket – $11,900

The Benefits of HSA Contributions

Most health insurance plans are moving to higher deductibles to save costs. If your plan meets the HDHP requirements, you are eligible to contribute to a HSA.

An HSA, is a a tax-favored savings account to help pay for a high deductible.  If you don’t reach the deductible, any money left in your savings account stays in that account and is invested tax deferred.

More specifically, the benefits of a HSA are:

  • Any contributions you make are tax deductible
  • Any withdrawals for qualified medical expenses are never taxed
  • Interest earned in your HSA account with the money not used to pay for health expenses is tax deferred. If those funds go unused until the age of 65, you’re allowed to withdraw them with no additional penalty, similar to a Traditional 401(k)
  • Any money invested in your HSA is yours to keep. It’s not a “use it or lose it” account like a FSA

If you think you may benefit from having a Health Savings Account, let us know and we’ll put you in touch with someone who can help you get started.