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Guest Article
(From the May 26, 2009 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)
Health Savings Accounts: Inflation-Adjusted Limits Are Released for 2010
For taxable years beginning in 2010, the new inflation-adjusted limits allow an eligible individual to contribute $3,050 for single coverage (or $6,150 for family coverage) to a Health Savings Account.
Inflation-adjusted limits for health savings accounts (HSAs) under Internal Revenue Code §223 must be published by June 1 of each year, as required by the Health Opportunity and Patient Empowerment (HOPE) Act of 2006.
Meeting that requirement, the Internal Revenue Service released Revenue Procedure 2009-29 on May 15, 2009. The release provides the adjusted limits for taxable years beginning in 2010. The new 2010 limits are summarized and compared with 2009 in the following chart.
HAS Inflation-Adjusted Limits
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Single Coverage |
Family Coverage |
| Annual Contribution Limit |
2009 |
$3,000 |
$5,950 |
| 2010 |
$3,050 |
$6,150 |
| Annual Catch-up Contribution Limit* |
2009 |
$1,000 |
$1,000 |
| 2010 |
$1,000 |
$1,000 |
| HDHP – Minimum Deductible |
2009 |
$1,150 |
$2,300 |
| 2010 |
$1,200 |
$2,400 |
| HDHP – Maximum Annual Out-of-Pocket |
2009 |
$5,800 |
$11,600 |
| 2010 |
$5,950 |
$11,900 |
*Only eligible individuals who are 55 years old or older as of the close of the taxable year can make catch-up contributions. The catch-up contribution limit is set by statute, and is not adjusted for inflation.
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Prior to 2007, the HSA annual contribution limit was the lesser of the eligible individual’s high-deductible health plan (HDHP) deductible or the inflation-adjusted annual contribution statutory limit. However, the HOPE Act removed the HDHP deductible from the equation effective for 2007 and later tax years. Therefore, for taxable years beginning in 2010, all eligible individuals can contribute up to $3,050 ($3,000 in 2009) to their HSAs if they have single coverage, and $6,150 ($5,950 in 2009) if they have family coverage, regardless of their HDHP deductible amounts.
Other Recent HSA Changes
Under the HOPE Act, the following other changes were also made to the HSA rules:
- Larger Contributions for Non-Highly Compensated Employees: Employers are permitted to make larger contributions to the HSAs of non-highly compensated employees than to the HSAs of highly compensated employees without violating the employer comparable contribution requirement.
- One-Time Rollover from FSA or HRA: Employees are allowed to complete a one-time rollover from their health flexible spending arrangements or health reimbursement arrangements to their HSAs.
- Maximum Contribution if Eligible During the Last Month: Individuals are permitted to contribute the maximum annual amount to their HSAs as long as they are eligible individuals during the last month of the taxable year.
- One-Time Rollover from IRA: Individuals are permitted to complete a one-time rollover from their individual retirement accounts to their HSAs.
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| The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.
If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.572.7677, Bart Massey 202.220.2104, Mark Neilio 202.378.5046, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955.
Copyright 2009, Deloitte. |
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