Health Savings Account (HSA) rules and limits include a maximum amount you can contribute to your HSA account for 2024 and 2025 and which types of health insurance plans qualify as a "high deductible health plan."
According to the federal guidelines, you can open and contribute to an HSA if you:
Are covered under a qualifying high-deductible health plan (HDHP), which meets the minimum deductible and the maximum out-of-pocket threshold for the year
Aren't covered by any other medical plan, such as a spouse's plan, Medicare, TRICARE or TRICARE for Life, claimed as a dependent on someone else's tax return
Don't have any disqualifying alternative medical savings accounts, like a Flexible Spending Account or Health Reimbursement Account
How does a Health Savings Account Work?
Contributions to an HSA are tax-deductible.
For employer-sponsored plans, the contributions are deducted from paychecks. If you're self-employed, the deductions can be taken when your annual taxes are prepared.
Withdrawals from an HSA are tax-free, provided the money is used to pay for qualified medical expenses. These expenses can include payments for dental and vision care, which some medical health insurance plans do not cover
Most HSAs issue a debit card that can be used to pay for prescription medications and other eligible expenses. If you wait for a bill to come in the mail, you can make a payment over the phone using your debit card.
No Use-It-or-Lose-It Worries
Any money that is in your account at the end of the year remains in your account to pay for future qualified medical expenses.
End-of-year balances are carried over indefinitely.
The account and its funds belong to you, and you retain ownership even if you change health insurance plans, change jobs, or retire. While it's in the account, the money grows tax-free.
How Much Can I Contribute to a HSA?
The IRS sets limits that determine the combined amount that you, your employer, and any other person can contribute to your HSA for 2024 and 2025:
2024 | 2025 | ||
Maximum Individual Contribution | $4,150.00 | $4,300.00 | |
Maximum Family Contribution | $8,300.00 | $8,550.00 | |
Catch-Up Contribution(for 55 or older) | $1,000.00 | $1,000.00 |
If you are 55 or older, you can add up to $1,000 more yearly as a "catch-up" contribution. So, instead of being limited to a contribution of $4,150 for 2024, you're limited to a contribution of $5,150.