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Annual
Contribution Maximums Increased |
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Detail of the Changes
The 2007 annual HSA contribution maximum for
individual High Deductible Health Plan (HDHP) coverage is $2,850.00. The
2007 annual HSA contribution maximum for family HDHP
coverage is $5,650.00. The HDHP deductible no
longer has any bearing on the annual HSA
contribution maximum.
What This Means for You
The change related to contribution amounts means you
can deposit more money into your HSA and reduces the
chance that you will use all of your HSA funds
before you reach out out of pocket maximums.
This change also means that HSA savers can
accumulate greater balances in their HSA. |
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FSA
and HRA Transfers Into an HSA |
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Detail of the Changes
For the next five (5) years an employer can make a
one-time transfer of Flexible Spending Account (FSA) and
Health Reimbursement Arrangement (HRA) balances into an
HSA. The amount of the transfer cannot exceed
the balance of the FSA/HRA as of September 21, 2006,
the employer must make this transfer option
available to all employees, and the employee who
elects this transfer must maintain an HSA-eligible
HDHP for a period of 12 months after the transfer.
What This Means for You
This one-time transfer helps you transition from
your FSA or HRA, where a use-it or lose-it applies
to all balances, to an HSA, where unused balances
rollover from year to year and offer a host of other
benefits for individuals and families. |
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HSA
Contributions for Mid-Year Enrollees |
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Detail of the Changes
Anyone enrolling in an HSA-eligible HDHP at any
point during the calendar year can now contribute
the annual contribution maximum ($2,650 for
individual plans and $5,650 for family plans) to
their HSA. You must maintain your HSA-eligible
HDHP for a period of 12 months after your initial
contribution is made.
What This Means for You
Regardless of whether you enroll in an HSA-eligible
HDHP in February or September, you now get the
benefit of contributing the annual maximum.
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IRA
Transfer Into an HSA |
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Detail of the Changes
An individual can now make a one-time, irrevocable
transfer from an Individual Retirement Account (IRA) to an HSA. The transfer
does count against the annual contribution maximum
and requires the individual to be in an HSA-eligible HDHP for a period of 12 months after this transfer
is complete.
What This Means for You
While this transfer does not offer an additional tax
deduction, it does help individuals with IRA
balances get a head-start on contributing to your
HSA. |
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Greater Contribution Limits for Lower Paid Employees |
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Detail of the Changes
Employers can now make greater HSA contributions to
those employees that earn less than $100,000
annually. However, if the employer elects to
exercise this right, they must make the same
contribution amount to all employees who earn less
than $100,000 annually.
What This Means for You
Employers can spur HSA usage through this exception
to comparability. Additionally, this change
benefits employers who currently don't make HSA
contributions through a cafeteria plan. |
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FSA
Grace Period No Longer Impacts HSA Eligibility |
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Detail of the Changes
If an individual begins a year with a zero balance
in their FSA, or transfers the balance of their FSA
to an HSA, the grace period coverage will not have
any impact on the individual's ability to make an
HSA contribution.
What This Means for You
Prior to this change, any individual whose employer
took advantage of the grace period was ineligible to
make an HSA contribution as they were deemed as
having additional coverage. |
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