HSA Contribution Limits For 2012

The Internal Revenue Service (IRS) has announced the annual health savings account contribution limits for 2012 in an update to Revenue Proc. 2011-32. The maximum contribution levels for Health Savings Accounts (HSA's) and deductible out of pocket limits for High Deductible Health Plans (HDHP's) that are required to be used with HSA's have been released.

Maximum contribution limits for 2012 have been increased compared to the previous year as follows:

• Maximum annual Health Savings Account (HSA) contribution limit has been increased to $3100 for an eligible individual with self-only coverage. An increase of $50 per year over 2011.
  
  
• Maximum annual HSA contribution is $6,250 for family coverage. An increase of $100 per year over 2011.
  
  
• For those who are 55 years old and above, additional allowable catch up contributions are $1000 over the new individual maximum of $3100. Therefore, the maximum allowed for those 55 years or older is now $4100.
  
  
• Individuals/Families who are eligible during the last month of the tax year (December) are allowed to contribute the full contribution amount to their HSA's plans for that year (plus $1000 for catch up contributions for those 55 years old and above).
  
  
• Annual maximum out-of-pocket for the linked eligible High Deductible Health Plan (HDHP) is $6,050 for self coverage and $12,100 for family coverage.
  
  
• The minimum deductible for HDHP's has been kept at the same level from 2011 at $1,200 for self-coverage and $2,400 for family coverage.

Some important changes from 2011 have been kept include:

• For HSA's and other qualified accounts, a medicine or drug will be a qualified medical expense only if the medicine or drug:
  1. Requires a prescription
  2. Is available without a prescription (an
     over-the-counter medicine or drug) and you get a
     prescription for it, or
  3. Is insulin.

  Non-Qualified Medical Expenses Tax Penalty . For HSA and MSA purposes,
  the additional tax on distributions not used for qualified
  medical expenses remains at 20%.
  source: IRS Publication 969

Health Savings Accounts (HSA's) and High Deductible Health Plans (HDHP's) continue to be a very smart choice for those who are not covered by employer group health coverage. It's a great option for those who want coverage and also allows them to possibly save for retirement with unused health care dollars.

If you are looking for a High Deductible Health Plan (HDHP) or just want to compare rates to see if you can save money overall verses your current eligible plan, then we recommend InsureMe where you can compare rates from dozens of insurers such as Aetna, Humana, BCBS, Anthem, United Health and many more. Check with your HSA institution to be sure that any new health plan is compliant with IRS regulations and will be compatible with your health savings account.

You can also search our agent network which includes individual insurance agents as well as plans from Aetna, Humana, BCBS, Anthem, United Health and many more..

Another great source of HSA eligible health plans and accounts is eHealthInsurance.com.

Information about 2012 HSA contribution limits from treasury.gov and irs.gov. This should not be considered financial advice which can only be given by a qualified financial and/or tax professional. We suggest you consult with a qualified financial planner and/or tax professional. The information above is accurate to the best of our knowledge. Federal laws and guidelines change frequently and any changes to these programs may not be reflected in this article. We are an affiliate of the Bankrate Insurance Network.

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