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A Health Savings Account (HSA) is one type of medical savings account that employees can use if they have a high deductible health plan (HDHP). The account can be used to pay for expenses covered under the HDHP until their deductible is met. It can also be used to pay for qualified medical expenses that are not covered under the HDHP, such as dental and vision expenses.
There are strict rules for HSAs due to their potential tax savings. The rules include limits on annual contributions and HDHP cost-sharing.
2020 Contribution Limits
- 2020 contribution limits are $3,550 for individuals with self-only HDHP coverage and $7,100 for individuals with family HDHP coverage.
- Individuals who are age 55 or older may make an additional $1,000 “catch-up” contribution.
2020 HDHP Cost-Sharing Limits
- The minimum deductible is $1,400 for self-only HDHP coverage and $2,800 for family HDHP coverage.
- The out-of pocket maximum is $6,900 for self-only HDHP coverage and $13,800 for family HDHP coverage.
Download the bulletin to learn more about employee eligibility, contributions, distributions, and more.