IRS Announces 2012 HSA Contribution Limits July 8, 2011
The International Revenue Service has announced the 2012 contribution limits for health savings (HSAs) and cost-sharing, amounts for HSA-eligible, high deductible health plans (HDHPs).
- Annual HSA contribution limits will be $3,100 for individual and $6,250 for family coverage. That is increased slightly from $3,050 for individual and $6,150 for family coverage in 2011.
- Maximum out-of-pocket expenses (deductibles, co-payments and co-insurance) for HSA-eligible health plans will be $6,050 for individual for $12,100 for family coverage. Those are also slight increases from the 2011 out-of-pocket maximum of $5,950 and $11,900 in 2011.
- For those over 55 years of age, the catch up provision is still the same, which is $1000.
- Annual HSA contribution limits will be $3,100 for individual and $6,250 for family coverage. That is increased slightly from $3,050 for individual and $6,150 for family coverage in 2011.
- Maximum out-of-pocket expenses (deductibles, co-payments and co-insurance) for HSA-eligible health plans will be $6,050 for individual for $12,100 for family coverage. Those are also slight increases from the 2011 out-of-pocket maximum of $5,950 and $11,900 in 2011.
- For those over 55 years of age, the catch up provision is still the same, which is $1000.
Senator Hatch Introduces Legislation to Improve HSA Access and Expand Small Business Coverage Options
- On May 26, Senator Orrin Hatch (R-UT) and Representative Erik Paulsen (R-MN) introduced legislation supported by NAHU that would repeal the part of PPACA that will prohibit small business owners from buying health insurance policies with individual deductibles that exceed $2000 in 2014. The Family and Retirement Health Investment Act of 2011 will also expand the use of tax-exempt health savings accounts (HSAs) and allow for individuals to roll over $500 flexible spending accounts (FSAs) annually.To improve HSAs, the legislation will:
· Remove the onerous new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs;
· Allow individuals to roll over up to $500 from their FSA accounts;
· Clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible;
· Reauthorize the use of Medicaid health opportunity accounts;
· Promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and better diet;
· Allow seniors enrolled in Medicare Part A to continue contributing to their HSAs; and
· Allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars.
Health Care Reform Law Voucher Provision Repealed
Health Care Reform Law Voucher Provision Repealed President Barack Obama has signed into law a bill that repeals a health care reform law provision that would have required employers to offer low-wage employees company-paid vouchers to buy coverage in state health insurance exchanges.
Under the provision, starting in 2014 employers would have been required to offer vouchers to employees with household incomes up to 400% of the federal poverty level and whose premium contributions were between 8% and 9.8% of their household income.
The value of the voucher would have been equal to what their employer would have paid if the employee enrolled in a plan with the largest employer premium contribution. Employees then could have used the voucher to buy coverage in an exchange and keep the difference in cash if the plan they purchased cost less.
Under the provision, starting in 2014 employers would have been required to offer vouchers to employees with household incomes up to 400% of the federal poverty level and whose premium contributions were between 8% and 9.8% of their household income.
The value of the voucher would have been equal to what their employer would have paid if the employee enrolled in a plan with the largest employer premium contribution. Employees then could have used the voucher to buy coverage in an exchange and keep the difference in cash if the plan they purchased cost less.
What you need to know regarding Health Savings Accounts (HSAs) in 2011
Effective January 1, 2011, you will no longer be able to use your health savings account (HSA) dollars to pay for over-the-counter (OTC) medicines at a pharmacy, supermarket or other retail store without a prescription from your doctor. If you have a health care debit card you can still use it to pay for the prescription medicines, including insulin, if those are eligible expenses under an employer's health plan. If you have a prescription for an OTC medicine, such as Zyrtec or Prilosec, and use your HSA to pay for it you will need to keep copies of the prescription and receipt for the purchase with your tax records.
Beginning January 1, 2011, if your HSA is used to pay for items or services that are not qualified medical expenses, the IRS penalty will increase from 10 percent to 20 percent of the HSA dollars used.
Information provided from UnitedHealthcare November 2010
Beginning January 1, 2011, if your HSA is used to pay for items or services that are not qualified medical expenses, the IRS penalty will increase from 10 percent to 20 percent of the HSA dollars used.
Information provided from UnitedHealthcare November 2010