Health Savings Account (HSA)

A HSA is a tax-advantaged account allowing enrollees of a high deductible health plan to set aside pre-tax dollars for future medical expenses. This account is employee owned and unspent funds rollover annually. Employer contributions are not subject to FICA. In order to establish a HSA, you must have coverage under a HSA qualified high deductible health plan (HDHP). Generally this high deductible health plan does not cover first dollar medical expenses and Federal law requires the following:
• Insurance deductible must be at least $1,100 for a single, $2,200 for a family
• Annual out of pocket maximums including deductibles, co-pays and coinsurance cannot exceed $5,600 single and $11,200 for a family.
• The maximum that you can contribute to a 2008 HSA is $2,900, single and $5,800 family. Individual's age 55 and older can make additional annual catch-up contributions of $900 in 2008 and $1,000 in 2009.
• 2007 maximum contributions: $2,850 for a single and $5,650 for a family.