Who can have a Health Savings Account?

Any adult individual can contribute to a Health Savings Account if they:

• have coverage under a High Deductible Health Plan
• are not covered by any health plan that is not an HDHP (exceptions exist for insurance that covers accidents, disability, dental care, vision care, long-term care and other "permitted insurance.)
• are not enrolled in Medicare
• are not claimed as a dependent on someone else's tax return.

The Contribution limits and out-of-pocket expenses for 2012 have changed while the Deductible limits for 2012 have not as announced by the IRS on May 24, 2011.

The person who opens a Health Savings Account is called the HSA owner.

You, your employer, or both can make contributions to a Health Savings Account.

The total amount you may contribute to an HSA for any taxable year is dependent upon whether you have individual or family coverage under a high deductible health plan (HDHP) as shown in the table below.

In addition to the standard HSA contribution limits shown in the table, if you have reached age 55 before the close of a taxable year, you may also contribute an additional amount known as a "catch-up" contribution. The catch-up contribution limit is $1000 for 2009 and later years.

If you make a contribution, you can deduct the contributions when completing your federal income tax return.

Contributions to the HSA must stop once you are enrolled in Medicare. You can, however, keep the money in your account and use it to pay for medical expenses, tax-free.

The information on this page is provided by Ascensus, Inc and the IRS, and is not intended as tax advice. Please consult a tax professional.