2008 HSA CONTRIBUTION LIMITS ANNOUNCED

2009 HSA Contribution Limits Announced

The U. S. Treasury Department recently announced new contribution limits for Health Savings Accounts tied to HSA-qualified medical plans for calendar year 2009. Vermont employers are encouraged to visit our Frequently Asked Questions page or contact Benefit Design & Strategies LLC at 888-545-9772 with your specific HSA questions.

HSA Contribution Limits for 2009:

	Single (Individual) coverage	$3,000
	Two-Person or Family coverage	$5,950

These "Statutory Limits" are slightly higher than the 2008 maximums. The maximum annual deposit levels must factor in contributions from both the employer and employee, but exclude the “catch-up” contribution limit for accountholders age 55 and older.

“Catch-Up” Contributions for Older Accountholders

These Statutory Limits do not include the “catch up” contributions that an accountholder who is 55 years of age or older (but not spouses) is able to make. For 2009 the catch up contribution limit is $1,000 compared to $900 for 2008. Unless there is a change in the law, the maximum “catch-up” contribution will remain at $1,000 in future years.

Thus, during 2009 (and the first 3 ½ months of 2010) the 55 and older accountholder can contribute up to a total of $4,000 for single coverage and $6,950 for two-person or family coverage.

Embedded or Stacked Deductible Feature

Some health plans include an attractive feature called an "embedded" or "stacked" deductible. This feature can save you lots of money be reducing the size of the two-person or family calendar year deductible when just one family member requires expensive treatment. Should a family member have covered medical claims that exceed the plan's single deductible, then these additional claims for the balance of the calendar year are paid by the medical plan at either 100% (if the plan has no co-insurance level) or at the subscriber's co-insurance (say 20% on an 80%/20% co-insurance plan) until this second threshold is met, and then at 100% for the balance of the calendar year.

Benefit Design & Strategies can help you select an HSA plan in Vermont that includes this feature.

No Prorating of Contributions When Starting Up an HSA Plan

Unlike in years prior to 2007, the regulations no longer require any prorating of contributions based upon the month that you begin your HSA medical plan or when you celebrate your 55th birthday to be eligible for the catch-up contribution. However, prorating of contributions is still required should you end your HSA coverage before the end of the calendar year.

Maximum Deductible and Out-of-Pocket Limits for 2009

In this same announcement, the Treasury Department released the 2009 deductible and total out-of-pocket expense limits for HSA-qualified medical plans (the dollar amounts for which the subscriber would be responsible) in order for such a health plan to be in conformance with the Department guidelines:

Minimum Annual Deductible Limits:		Annual Total Out-of-Pocket Limits:
Single coverage	$1,150	Single coverage	$5,800
Two-Person & Family	$2,300	Two-Person & Family	$11,600

For PPO (Preferred Provider Organization) plans, these limits apply only to in-network benefits; out-of-network benefits are permitted to have higher deductibles and out-of-pocket maximums.

Among Vermont health insurance carriers, the lowest deductible currently available for an HSA-Qua;ified plan is $1,500 for single coverage and $3,000 for family coverage; the largest deductible offered is $5,000 and $10,000 respectively.

HSA Plans are Becoming More Popular

As of January, 2008 (latest figure available) just over 6.1 million people in the U.S. were covered by HSA plans including nearly three million employees (and their dependents) working for companies with more than 50 employees, according to a survey conducted by the America’s Health Insurance Plans, a Washington trade group. Vermont has one of the highest per capita participation rates among all the 50 states, ranking in the top five.