Health Insurance Daily

2006 Indexed Amounts For Health Savings Accounts

The Department of Treasury issued new guidance on October 28, 2005 on the maximum contribution levels, deductibles and out-of-pocket maximum spending limits for high deductible health plans (HDHPs) that must be used in conjunction with health savings accounts (HSAs) in 2006. New amounts for 2006 have been indexed for cost-of-living adjustments for 2006. These are included in Revenue Procedure 200r-70.

New annual contribution levels for HSAs:

• For 2006, the maximum annual HSA contribution for an eligible individual with self-only coverage is $2,700.
• For family coverage, the maximum HSA contribution is $5,450.
• Catch up contribution for an individual who is 55 or older is increased to $700 for 2006.
• Remember, for any individual, the maximum contribution amount is the lesser of the indexed amount or the deductible of the HDHP. Both the HSA contribution and the catch up contribution are pro rated based on the number of months of the year a person is an eligible individual.

New Minimum Deductible Amounts for HSA-compatible HDHPs:

• For 2006, the minimum deductible for single coverage increases to $1,050 for self-only coverage and to $2,100 for family coverage.
• Fiscal year HDHPs that satisfy the requirements for an HSA-compatible HDHP on the first day of its fiscal year may apply that deductible for the entire fiscal year.

New Amounts for Out-of-Pocket Spending on HSA-compatible HDHPs:

• The maximum annual out-of-pocket amount for HDHP self-coverage increased to $5,250 and the maximum annual out-of-pocket amount for HDHP family coverage is $10,500.

To review the Department of Treasury press release, click on: http://www.treas.gov/press/releases/js2996.htm

posted by Mike @ 8:25 AM