Health Savings Account Help
Once an individual enrolls in Medicare, contributions, including catch-up contributions, cannot be made beginning with the month the individual enrolls.
EXAMPLE: Pearl, who is covered under an HDHP with self-only coverage, attains age 65 and enrolls for Medicare benefits on March 1, 2018. Her 2018 contribution limit is 2/12 of the statutory contribution limit. She may make contributions for January and February, but may not make any contributions for March through December 2018 or thereafter.
If both spouses are eligible individuals, the total contribution limit for both spouses cannot exceed the family coverage maximum contribution, divided equally between the spouses unless they agree upon a different division. Regardless of how the limit is divided between the spouses, the aggregate contributions between the two spouses cannot exceed the maximum annual contribution amount for family coverage, (i.e., $6,900 for 2018).
EXAMPLE: Leah and Jon are married. They are both 42 years old and both have family coverage under HDHPs. In this scenario, Leah and Jon in aggregate cannot exceed a contribution of $6,900 for 2018. Each may contribute $3,450 to an HSA for 2018, unless they decide to divide the amount in a different way.
Catch-up contributions: One or both spouses may make catch-up contributions, if age eligible. For example, if both spouses are age 55 or older by the end of 2018, total contributions to their HSAs cannot exceed $8,900 ($6,900 maximum limit + $1000 catch-up for each spouse), when both have family coverage.
Archer MSA contributions: The family coverage limit is reduced by any contributions to Archer MSAs.
- diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function on the body;
- transportation for the essential medical care listed above;
- qualified long-term care services;
- premiums for qualified long-term care insurance, COBRA health care continuation coverage, health care coverage while an individual is receiving unemployment compensation; for individuals over age 65, premiums for Medicare Part A or B, Medicare HMO, and the employee share of premiums for employer-sponsored health insurance, including premiums for employer-sponsored retiree health insurance; and
- certain amounts paid for lodging while away from home that is essential to medical care.
- Contributions are considered employer-provided coverage for medical expenses
- Increased ability to attract and retain employees
- Lower overall health insurance costs
- Ability to carry over contributions
- Portability of assets
- Payment of medical costs with pretax dollars
- Potential for additional employee benefits