The IRS announced contribution limits for Health Savings Account (HSA) for 2013.
HSA Contribution Limits
You can only contribute to an HSA if you have a High Deductible Health Plan (HDHP).
The IRS also defines what qualifies as an HDHP. For 2013, an HDHP with individual coverage must have at least $1,250 in annual deductible and no more than $6,250 in annual out-of-pocket expenses. For family coverage, the numbers are minimum $2,500 in annual deductible and $12,500 in annual out-of-pocket expenses.
HSA vs. FSA
I chose an HDHP and HSA for the first time this year. So far so good. I like the flexibility provided by the HSA over the FSA, which I used in the past. No more guesses on how much I should put in every year.
I’m using the HSA provider my employer chose because I get to save a bit of FICA tax if I contribute by payroll deduction. After the year is over, I’m planning to write a check and transfer the balance to my own HSA.
Reference: IRS Revenue Procedure 2012-26
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