HEALTH SAVINGS ACCOUNT LIMITS RELEASED FOR 2013

The IRS has provided the annual inflation-adjusted contribution, deductible and out-of-pocket expense limits that will apply to health savings accounts for 2013.

Subject to statutory limits, eligible individuals may make tax-deductible contributions to health savings accounts (HSAs). In general, an "eligible individual" is a person covered under a high-deductible health plan (HDHP).

Employers as well as other persons, such as family members, may also make contributions on behalf of an eligible individual. Employer contributions are usually excluded from income.

General-purpose health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) tend to preclude HSA eligibility. However, exceptions apply for, among other things, limited-purpose FSAs and HRAs (those providing only certain benefits, e.g., dental and vision) and FSAs and HRAs imposing high annual deductibles.

HSA distributions not used to pay for qualifying medical expenses generally are included in income and are subject to a 10 percent penalty tax.

For calendar year 2013:

  • The limitation on deductions for an individual with self-only coverage under an HDHP is $3,250 (up from $3,100 for 2012).
  • The limitation on deductions for an individual with family coverage under an HDHP is $6,450 (up from $6,250 for 2012).
  • An HDHP is defined as a health plan with an annual deductible of not less than $1,250 for self-only coverage (up from $1,200 for 2012) or $2,500 for family coverage (up from $2,400 for 2012)
  • The annual out-of-pocket expenses - deductibles, co-payments, and other amounts, but not premiums - do not exceed $6,250 for self-only coverage (up from $6,050 for 2012) or $12,500 for family coverage (up from $12,100 for 2012).

Read more in Revenue Procedure 2012-26.

 
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