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). Funds can be used to pay for eligible health care expenses for the member, their spouse and their tax dependents. Or funds can be saved for the future.
Under current Internal Revenue Service rules, the annual contribution limits are:
|HSA Annual Contribution Limits for 2019/2020|
|Age 55+ catch-up provision allows an additional $1,000 contribution||$4,500 or $8,000|
For the upcoming plan year FY 2021, annual contribution limits are:
|HSA Annual Contribution Limits for 2020/2021|
|Age 55+ catch-up provision allows an additional $1,000 contribution||$4,550 or $7,100|
The HSA plan is administered by Payflex (www.payflex.com). Members should Carefully review HSA election with their 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 individual HSA accounts if calendar-year maximum amount is exceeded.
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 allowing them to take the account with them should they 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: