What You Can Contribute
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.
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