Last week the IRS released the parameters for health savings account-compatible high deductible health plans, or HDHPs, for 2012.
We continue to endorse our clients use of these tax-efficient vehicles as a fundamental strategy to health plan design. Three primary reasons are 1) these are the most tax-efficient benefit available … better than HRA’s, IRA’s Roth’s and FSA’s. 2) the value of HSA’s will grow with importance as employers will seek tax efficiency with looming federal, state and local deficits, potential repeal of Bush tax cuts and higher taxes coming in 2013 and 2014 from federal health care reform; and 3) HSA’s require a qualified high deductible health plan and the purpose of insurance is for infrequent and catastrophic events. So if you give your employees an account they can contribute to that rolls over each year you will find your plan participants will begin to make more rational economic choices with regard to their health.
These limits are tied to changes in the Consumer Price Index by application of cost-of-living adjustment rules. The limits for 2012 are set forth below:
Annual HSA Contribution Maximum: $3,100 for single coverage, $6,250 for family coverage (increase from $3,050 and $6,150 in 2011)
Annual Catch-Up Contribution Maximum: $1,000 (for HSA eligible individual age 55 or older) – no change from calendar year 2011
HDHP Minimum Deductible: $1,200 for single coverage, $2,400 for family coverage – no change from calendar year 2011
HDHP Out-of-Pocket Maximum: $6,050 for single coverage, $12,100 for family coverage (increase from $5,950 and $11,900 in 2011)