Health care Reform Impact HSA’s
Texas Health Insurance – Here is an overview of how the new legislation will affect health savings accounts in the future.
Does the new law eliminate HSA’s?
No, HSA’s will not be eliminated with the new law and you can continue to use your HSA like you have until the end of 2010. Texas Individual Health Insurance
What will happen in 2011 with my HSA?
Beginning in 2011, the tax levied on non qualified HSA distributions (withdrawals taken before age 65 that are not qualified medical expenses) will increase from 10% to 20%. If you continue to use the HSA for qualified medical expenses, this penalty will not affect you. Also, HSA funds can no longer be used to purchase over the counter medication, unless they are prescribed by a health care professional. Texas Health Insurance
What are the contribution limits in 2011?
The contribution limits will remain the same as 2010. If you are covered under an individual plan the maximum IRS contribution is $3050. If you are covered under a family plan, the maximum IRS contribution is $6150. If you are over 55, you can make an additional $1000 catch up contribution. If you have a spouse who is over 55 you must open a second account in order to take advantage of the catch up contribution. Texas Individual Health Insurance
Can I still use my HSA for over the counter drugs?
Yes, for the remainder of 2010. In 2011, you are no longer allowed to purchase over the counter medications, unless they are prescribed by a health care professional. This is the last year to buy over the counter medications tax free with your HSA, so this might be something to take advantage of in 2010 while it lasts. Texas Health Insurance
What happens to my HSA if I am no longer eligible to contribute? (Switched to a non-qualified HSA plan, loss of employment, etc)
You can continue to use the funds in your HSA for qualified medical expenses or save it for the future even if you are no longer eligible to contribute more to your HSA. Texas Individual Health Insurance
Tags: Texas Health Insurance, Texas Individual Health Insurance
