IRS Announces Health Savings Account Limitations for 2012

Some annual contribution limits for health savings accounts (HSAs) are increasing in 2012 [Rev Proc 2011-32, 2011-22 IRB].

Eligible individuals may, subject to statutory limits, make deductible contributions to an HSA. Employers, as well as other persons (e.g., family members), may also contribute on behalf of an eligible individual. Employer contributions generally are treated as employer-provided coverage for medical expenses under an accident or health plan and are excludable from income. In general, a person is an “eligible individual” if he or she is covered under a high deductible health plan (HDHP) and is not covered under any other health plan that is not a high deductible plan, unless the other coverage is permitted insurance (e.g., for worker's compensation, a specified disease or illness, or insurance providing a fixed payment for hospitalization).

For calendar year 2012, an HDHP is a health plan with: (1) an annual deductible of at least $1,200 for individual coverage, or $2,400 for family coverage (these figures are unchanged from 2011); and (2) maximum out-of-pocket expenses of $6,050 for individual coverage, ($5,950 in 2011) or $12,100 for family coverage ($11,900 in 2011).

For 2012, the maximum annual contribution to an HSA is $3,100 for self-only coverage ($3,050 in 2011) and $6,250 for family coverage ($6,150 in 2011).