HSA Compliance

A Health Savings Account (HSA) is a tax-advantaged medical savings account someone can contribute to and draw money from for certain medical expenses tax-free. HSAs can be used for out-of-pocket medical, dental, and vision. HSAs can’t be used to pay health insurance premiums. HSAs can only be used with “High Deductible Health Plans (HDHPs)" that count as "Minimum Essential Coverage (MEC)".

All funds put into an HSA are 100% tax deductible from gross income. There are limits to the amount of money one can put in tax free and the amount of money that can be used tax free as well. Funds roll over year to year and can be used with Medicare after retirement. Income taxes and a 20% penalty is assessed to any money withdrawn for non-medical reasons. See the table below for HSA and HDHP limits.

Limits for HSAs and HDHPs

 

2020

2021

2022

2023

HSA Contribution Limit  Individual $3,550 $3,600 $3,650 $3,850
Family $7,100 $7,200 $7,300 $7,750
HSA Catch-up Contribution (age 55+) Individual $1,000 $1,000 $1,000 $1,000
HDHP Minimum Deductibles  Individual $1,400 $1,400 $1,400 $1,500
Family $2,800 $2,800 $2,800 $3,000
HDHP Maximum Out-of-pocket Amount  Individual $6,900 $7,000 $7,050 $7,500
Family $13,800 $14,000 $14,100 $15,000

There is a lot more to learn about HSAs than just the information above. B&P's HSA BackPack allows you to provide employers and employees with detailed presentations, handouts, enrollment forms and more. For even more information, please use the resources below.

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