Health Savings Accounts
Health savings accounts (HSAs) are pretax medical savings accounts available to taxpayers in the United States who are enrolled in a consumer-driven health plan (CDHP, a qualified high-deductible health plan). You can use the funds to pay for eligible health care expenses for you, your spouse and your tax dependents. Or you can save the funds for the future.
Under current Internal Revenue Service rules, the annual contribution limits are:
|HSA Annual Contribution Limits|
|Age 55+ catch-up provision allows an additional $1,000 contribution||$4,400 or $7,750|
The HSA plan is administered by Payflex (www.payflex.com). Carefully review your HSA election with your spouse/partner to avoid going over the annual contribution limits. There are tax penalties for excess HSA contributions. Rice will not withdraw excess funds from your HSA account if you go over your calendar-year maximum.
What is the advantage of an HSA over a traditional medical spending account?
Unlike a traditional medical spending account, funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, and you can take the account with you should you leave Rice. The HSA also has an option to invest the accumulation over $1,000 in selected mutual funds. The funds can accumulate tax free, grow tax free and be used for eligible expenses tax free. It’s a great way to save money for health care costs down the road, even in retirement.
To learn more, read through the resources below: