The basis of Health Savings Accounts is that you are building an account that can be used for current health care needs and expenses as well as preparing for future health care needs and expenses. Contributing to your Health Savings Account and how much you accrue over time is a key component in making your Health Savings Account work for you. So, how much can you contribute?
Annually, your Health Savings Account cannot exceed the deductible of your high deductible health plan. For example, if you decide upon a plan with an annual deductible of $1,050 (single person minimums) or $2,100 (family minimums), you cannot deposit more the $1,050 (single) or $2,100 (family) in your Health Savings Account for that year. In order to save more in your Health Savings Account you must choose a high deductible health plan with a higher deductible. Some policies have a very high deductible. In that case the most you can put into your account per year is $2,700 for single coverage and $5,450 for family coverage. This amount will increase for inflation in the future. When contributing to your Health Savings Account you can contribute in one single lump sum or in any amount and frequency you like.
Your employer can also contribute to your Health Savings Account. If your employer contributes a partial amount you can contribute the difference. You can find more information regarding employee contributions and tax benefits by visiting US Treasure Health Savings Account website.
If you are over 55 you have the option to make additional “catch-up” contributions each year until the individual enrolls in Medicare. Additional catch-up contributions made to your Health Savings Account are as follows:
2005-$600
2006-$700
2007-$800
2008-$900
2009 and after-$1,000
If managed correctly Health Savings Accounts can afford you the chance to make your health care needs and services that much more efficient over time. When searching for a high deductible health account, be sure to take into account the amount per year you are able to invest, being that the annual amount is dependent on your high deductible health account deductible.
Note: These numbers reflect the year 2006, the 2007 numbers and law changes have been approved by President Bush and are available now.
Author Karl Malin
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