The IRS announced contribution limits for Health Savings Account (HSA) for 2014.
HSA Contribution Limits
| 2013 | 2014 | Change | |
| Individual Coverage | $3,250 | $3,300 | +$50 |
| Family Coverage | $6,450 | $6,550 | +$100 |
You can only contribute to an HSA if you have a High Deductible Health Plan (HDHP).
HDHP Qualification
The IRS also defines what qualifies as an HDHP. For 2014, an HDHP with individual coverage must have at least $1,250 in annual deductible and no more than $6,350 in annual out-of-pocket expenses. For family coverage, the numbers are minimum $2,500 in annual deductible and $12,700 in annual out-of-pocket expenses.
| 2013 | 2014 | Change | |
| Individual Coverage | |||
| min. deductible | $1,250 | $1,250 | – |
| max. out-of-pocket | $6,250 | $6,350 | +$100 |
| Family Coverage | |||
| min. deductible | $2,500 | $2,500 | – |
| max. out-of-pocket | $12,500 | $12,700 | +$200 |
Reference: Rev. Proc. 2013-25, Internal Revenue Service
[Photo credit: Flickr user 401(K) 2013]
Say No To Management Fees
If an advisor is charging you a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.
JR says
Can you please let us know where you have your HSA account? Am confused between couple of options like Wells Fargo, HSA bank etc
Harry says
I have my HSA with Alliant Credit Union, where I also have my primary checking account. Anybody can join Alliant Credit Union by making a $10 donation to a supported charity. I don’t have much money in it because I only started last year. It pays 1% interest, not much, but there is no monthly fee. For HSAs offered by banks and credit unions, see a listing here:
http://www.depositaccounts.com/savings/health-savings-accounts.html
If you have a lot of money in your HSA and you’d like to invest the money, HSA Bank + TD Ameritrade is a good choice.
bn says
“If you have a lot of money in your HSA and you’d like to invest the money, HSA Bank + TD Ameritrade is a good choice.”
Do you have a number in mind that you would consider large? Basically an amount where it’s worth it to invest given the fees involved.
Harry says
I should add for ongoing contributions I’m using the provider chosen by my employer. It saves a bit of payroll tax that way. Then once a year I transfer the money out to my own account. See previous post How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee.
Harry says
bn – I read the HSA Bank fee schedule as saying the monthly fees are waived if you leave $5k on the bank side and invest the rest. The interest rate on that $5k is 0.30% at HSA Bank vs 1.05% at Alliant. That means the invested money had better make up the 0.75% difference on $5k. I’d say you need at least another $5k, for a total of $10k.
Margaret says
Can one make a contribution to one’s HSA the year one turns 65 and switches from the high deductible to a medicare advantage plan (latter half of the year)??
Thanks!
Harry says
Margaret – Yes, but the amount has to be prorated depending on how many months you are covered under the high deductible plan.
Beau says
Hi Harry, I’m interested in your take on the MadFientist’s HSA strategy (http://www.madfientist.com/hsa). I think it might be a good play if you can swing it cash flow wise and have a fireproof box for all those qualified expense receipts. 🙂 I appreciate your blog.
Harry says
That works although I don’t use it. My eligible expenses are low. I just pay them out the account and not worry about accumulating receipts for many years.