Aiken & Aiken

Sheila Aiken May 21st, 2008

The IRS released Revenue Procedure 2008-29 on May 13^th.  This Revenue Procedure details the 2009 inflation adjusted amounts allowed for Health Savings Accounts under Internal Revenue (Code) Section 223(g).  

For calendar year 2009, the annual limitation on deductions is:

• $3,000 for self-only coverage, or
• $5,950 for family coverage

HSAs are used in conjunction with High Deductible Health Plans (HDHPs) which are defined under Code Section 223(c)(2)(A).  For the 2009 calendar year, a HDHP is defined as a health plan with:

• An annual deductible that is not less than:
  • $1,150 for self-only coverage, or
  • $2,300 for family coverage, and
• Annual out-of-pocket expenses (including deductibles, co-payments and other amounts not including premiums) that do not exceed:
  • $5,800 for self-only coverage, or
  • $11,600 for family coverage

Additionally, the catch-up contribution for those individuals over age 55 is $1,000.  If both spouses are over 55 the catch-up contribution is $2,000.

HSAs have become increasingly popular for individuals and employers as a way to plan for and control healthcare costs.  The numbers of individuals covered under these health plans - High Deductible Health Plans with Health Reimbursement Arrangements - has rapidly increased.  The Government Accountability Office in Washington estimates that 4.5 million people were covered under HSAs in 2007 as opposed to an estimate of a little over 400,000 in 2004. 

• Benefits , ERISA , Health Care , Health Savings Accounts (HSAs)
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