The U. S. Treasury Department recently announced new contribution limits for Health Saving Accounts connected with HSA-qualified medical plans for calendar year 2008. Vermont employers are encouraged to visit our Frequently Asked Questions page or call Benefit Design & Strategies LLC at 888-545-9772 with your specific HSA questions.

For participants enrolled in single or individual health insurance coverage, the new limit will be $2,900 for next year compared with the 2007 limit of $2,850; and the maximum contribution for those having two-person or family coverage will be $5,800 for 2008, up from $5,650 for this year. The maximum annual deposit levels must factor in contributions from both the employer and employee or other family member.

These Statutory Limits do not include the added “catch up” contributions that primary participants 55 years of age or older (but not spouses) are able to make. For 2008 the catch up contribution limit will be $900 compared to $800 for 2007.

Thus, in 2008 a primary enrollee 55 years or older can contribute up to a total of $3,800 for single coverage and $6,700 for two-person or family coverage.

Unlike in years prior to 2007, the regulations no longer require any prorating of contributions based upon the month that one begins his or her HSA medical plan or when one celebrates his/her 55th birthday. Prorating of contributions is still required should a participant end his or her HSA coverage before the end of the calendar year.

In this same announcement, the Treasury Department released the new out-of-pocket expense limits (total of deductible and co-insurance amounts) for HSA-qualified medical plans for 2008: Single coverage $5,600; Two-Person and Family coverage: $11,200. For PPO (Preferred Provider Organization) plans, these limits apply to in-network benefits only; out-of-network benefits are permitted to have higher out-of-pocket maximums.

These new limits reflect increases in the cost of living and are released earlier than in previous years as mandated in the recently enacted Health Opportunity Patient Empowerment Act of 2006.

As of January, 2007 nearly 4.5 million people were covered by HSA’s including just over two million employees and 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.