Contributions can be made by:
- Accountholders, any third party on behalf of the accountholder, and an employer.
- Employers may contribute to an accountholders HSA as long as the employer makes comparable contributions available to all participating employees. Employer contributions are always excluded from employees income (pre-tax).
Violations of the comparability rules include:
- Extra contributions to an HSA on account of employees who meet a specified age or qualify for the catch-up contributions.
- Contributions based on length of service
- Employers must have a Section 125 plan in place in order to have HSA contributions or health insurance premiums taken out pre-tax on employee payrolls.
- Contributions may be made to your HSA by either electronic transfer or by a check. Contributions made by check need to be sent with a contribution form.
Partial Year Contributions:
- The maximum contribution you may make is proportional to the number of months left in the year. HSAs always run on a calendar year (January 1 through December 31).
Catch-Up Contributions:
- For tax year 2005, HSA accountholders whom are age 55 and older may make additional annual contributions. The maximum additional annual contribution is $600 (previously $500 in 2004), and it will increase by $100 each year to a maximum calendar year contribution of $1,000 in 2009
- Contributions must be in cash; they can not be made in stock or any other type of property or charged to a credit card.
- Rollovers can be made from a MSA to a HSA or a HSA to another HSA one time per year, and the account holder has 60 days to deposit the funds from the rollover without paying tax penalties.
- The self-employed, partners and S-Corporation shareholders are generally not considered employees and cannot receive an employer contribution.
- They can make contributions to the HSA on their own and claim the "above-the-line" deduction on their personal income taxes.
All contributions must be pro-rated if not eligible the entire year. This includes Catch-up contributions.
See http://www.treas.gov/offices/public-affairs/hsa/faq1_contributing.shtml for frequently asked questions.
What discrimination rules apply to HSAs?
- If an employer makes contributions to an employees HSA, the employer must make available comparable contributions on behalf of all "comparable participating employees" (i.e., eligible employees with comparable coverage) during the same period. Comparable contributions are either the same amount or the same percentage under the HDHP.
See http://www.treas.gov/offices/public-affairs/hsa/faq_employer-participation.shtml for employer information.
You can make a contribution to your HSA each year that you are eligible. You can contribute up to the amount of your HDHP deductible but no more than:
- $2,700 - Self-only coverage (2006)
- $5,450 - Family coverage (2006)
These amounts are adjusted annually for inflation.
The following table illustrates how this works.
| 2006 |
|
HDHP Deductible |
Maximum HSA Deposit |
| Single Coverage |
$1,050 |
$1,050 |
|
$1,500 |
$1,500 |
|
$2,000 |
$2,000 |
|
$2,500 |
$2,500 |
|
$3,000 |
$2,700 |
| Family Coverage |
$2,100 |
$2,100 |
|
$3,000 |
$3,000 |
|
$4,000 |
$4,000 |
|
$5,000 |
$5,000 |
|
$6,000 |
$5,450 |
| 2005 |
|
HDHP Deductible |
Maximum HSA Deposit |
| Single Coverage |
$1,000 |
$1,000 |
|
$1,500 |
$1,500 |
|
$2,000 |
$2,000 |
|
$2,500 |
$2,500 |
|
$3,000 |
$2,650 |
| Family Coverage |
$2,000 |
$2,000 |
|
$3,000 |
$3,000 |
|
$4,000 |
$4,000 |
|
$5,000 |
$5,000 |
|
$6,000 |
$5,250 |
Individuals age 55 and older can also make additional "catch-up" contributions. The maximum annual catch-up contribution is as follows:
2005 - $600
2006 - $700
2007 - $800
2008 - $900
2009 - and after - $1,000
Please remember that all contributions must be pro-rated if not eligible the entire year. This includes Catch-up contributions.
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