How Do I Contribute to My Health Savings Account?:

Once you have set-up your HSA, you will need to know how much you can contribute, how to add money to your account and what you can do with this money. Since HSA's are fairly new, regulations and requirements may change, but here are the basic guidelines.

How Much Can I Contribute?

The amount of money that you deposit into your HSA account depends on the amount of your deductible for your current insurance policy. For example, if your current deductible is $1000, you would be able to deposit $1000 each year into your account. The maximum amount you can deposit is $2650 if you are single, or $5250 if you have a family.

Is There a Limit on One-Time Deposits?

Many people wonder if there is a limit on how much they can contribute per month, or in a lump sum. There are no current monthly limits or set limits on contributions, as long as they fall below the allowable amount. So, if you want to deposit $75 one month and $150 the next, that would be allowed.

Am I Taxed On This Contribution?

No, the funds that you deposit into your HSA are considered as pre-tax income. You can deduct the amount of money that you contribute into your HSA from your income each year.

Can My Employer Contribute?

Yes. As long as the contributions do not exceed the maximum amount, you or your employer may contribute to your fund.

Can My Funds Be Used for Dependent's Medical Care?

Yes, the funds in your HSA may be used for your medical care, your spouse's medical care and your dependent's medical care. As long as the expenses are considered "medically necessary," you will still enjoy your tax benefits from the HSA.

What's the Catch-Up Clause For People Over 55?

In 2005, a new feature was added to HSA's. If you have an eligible health insurance plan and have turned 55, you are allowed to make "catch-up" contributions to your HSA. You will need to check with your plan administrator to see when your eligibility is determined and how this may affect your Medicare status. In between your 55th birthday and the date you are eligible for Medicare, you are allowed to catch-up by adding an additional amount to your account each year.

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