Health Savings Account Contributions

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HSA Contribution Limits

The maximum you may contribute to a Health Savings Account (HSA) is:

  tax year 2012   tax year 2013
Single Coverage
Family Coverage $6,250   $6,450

There is no legislated HSA minimum contribution. However, if you choose to establish an HSA, the administrator of your account will likely require a minimum initial deposit and maintenance of a minimum balance. These amounts vary by financial institution.

Catch-Up Contributions

HSA law includes a "catch up" provision for older citizens with fewer years to accumulate HSA savings (You can only make HSA contributions up to age 65.).

HSA holders age 55 and older may make additional annual contributions of $100. If the spouse is also 55 or older the total additional family HSA contribution can be as much as $2000.

Employer Contributions

In contributing to an employee's Health Savings Account (HSA), an employer needs to follow certain discrimination guidelines. The employer must make available comparable contributions on behalf of all "comparable participating employees." Contributions are considered comparable if they are the same amount or the same percentage of each employee's health plan deductible.

Employer contributions to HSAs are a tax-deductible health and welfare expense, generating no taxable income to employees -- as long as the discrimination guidelines are not violated.

Partial Year Contributions

HSA contribution limits are not subject to pro-rating. Even if you establish an HSA for a partial year, you can still make up to the maximum contribution for the tax year (For 2012, these maximum contributions are $3,100 for an individual and $6,250 for a family).

Contribution Frequency

How often you make HSA contributions is completely up to you. You can make an annual lump sum contribution, you can make regular monthly deposits, or you can make multiple deposits in no particular order. Your bank or HSA administrator will always be pleased to accept your money.

A common mistaken impression is that HSA contributions must coincide with your health insurance premium payments (typically monthly, bi-monthly or quarterly). Not so.

HSA Contribution Deadlines

If you want to claim the HSA contribution tax deduction for a particular year, your HSA contributions must be made on or before that year's tax filing date. For example, 2012 HSA contributions must be made on or before the April 2013 filing deadline.

HSA Contributions must be Cash

Health Savings Account (HSA) contributions must be in cash. Contributions cannot be made in stock or in other property.

Rollovers from Other Accounts

Rollover contributions from Archer MSAs and other HSAs are permitted. These rollover contributions are not subject to HSA annual contribution limits.

For employees switching to coverage under an HSA-compatible plan, employers can transfer funds from a Health Reimbursement Arrangement (HRA) or from a Flexible Spending Account (FSA). These rollover amounts also are not subject to the annual contribution limits.

One-Time Transfer from IRA

You can make a one-time HSA contribution of amounts distributed from an Individual Retirement Account (IRA). Generally, the IRA transfer is limited to once per lifetime, and the contribution must be made via a direct trustee-to-trustee transfer.

Excess HSA Contributions

HSA contributions by an individual are not tax-deductible to the extent they exceed the maximum annual limits. Excess contributions from an employer generates taxable income to the employee. In addition a 6% excise tax is imposed on the excess funds.

The excise tax and any net income attributable to excess contributions are avoided if the excess contributions are distributed to the HSA owner prior to the federal income tax deadline for the year at issue.

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