Health Savings Accounts (HSAs) let you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.
HSA funds roll over year to year if you don’t spend them. An HSA may earn interest or other earnings, which are not taxable. Please consult your tax advisor to discuss the best options for your situation.
While you can use the funds in an HSA at any time to pay for qualified medical expenses, you may contribute to an HSA only if you have a High Deductible Health Plan (HDHP).
The Internal Revenue Service (IRS) has recently announced limits for HDHPs and HSAs for 2021.
If you have an HDHP, you can contribute the following to your HSA:
- 2019 plan year: $3,500 for self-only coverage and $7,000 for family coverage
- 2020 plan year: $3,550 for self-only coverage and $7,100 for family coverage
- 2021 plan year: $3,600 for self-only coverage and $7,200 for family coverage
The minimum deductible for a policy to be considered an HDHP are:
- 2019 plan year: $1,350 for an individual and $2,700 for a family
- 2020 & 2021 plan years: $1,400 for an individual and $2,800 for a family
The total yearly out-of-pocket expenses, including deductibles, copayments and coinsurance) can’t be more than the following:
- 2019 plan year: $6,750 for an individual, $13,500 for a family
- 2020 plan year: $6,900 for an individual, $13,800 for a family
- 2021 plan year: $7,000 for an individual, $14,000 for a family
To learn more about Health Savings Accounts, visit HERE.
To learn more about the healthcare benefits provided by the CARES Act, visit HERE.