Using a Health Savings Account in 2019
For some, health insurance coverage most often means one thing: A high deductible. Whether this is due to a pre-existing condition or as a way to save money, a high deductible surprisingly isn’t always a bad thing. When used in conjunction with a Health Savings Account (HSA), it can be an effective and smart way to handle medical expenses.
How does an HSA work?
A health savings account (HSA) is essentially a savings account that is used to pay medical expenses. Any funds left in your HSA not only earn interest, but are yours to keep.
What are the benefits of an HSA?
An HSA allows you the option of purchasing a less expensive health insurance plan, provides a dedicated savings account for meeting those high deductibles, includes tax-deductible deposits, tax-deferred growth and tax-free for medical care. HSA’s can also be used for a wide variety of out-of-pocket expenses.
What’s the catch?
In order to utilize an HSA, it must be combined with a high deductible health insurance plan that meets the qualifications dictated by the law. Your HSA funds must also only be used for qualifying expenses.
The newest HSA limits as of 2019
The 2019 HSA contribution limits have increased, according to the Internal Revenue Service. The maximum contribution has risen $50 to $3,500 for individuals and $100 to $7,000 for families. Maximum catch-up contributions for folks aged 55+ remain at $1,000.
2019 vs. 2018 HSA and HSA-qualifying HDHP Limits
| SELF-ONLY COVERAGE | 2019 | 2018 | CHANGE |
| Maximum annual HSA contribution | $3,500 | $3,450 | +$50 |
| Minimum annual deductible for HDHP | $1,350 | $1,350 | No change |
| Maximum annual out-of-pocket expense limit for HDHP | $6,750 | $6,650 | +$100 |
| FAMILY COVERAGE | 2019 | 2018 | CHANGE |
| Maximum annual HSA contribution | $7,000 | $6,900 | +$100 |
| Minimum annual deductible for HDHP | $2,700 | $2,700 | No change |
| Maximum annual out-of-pocket expense limit for HDHP | $13,500 | $13,300 | +$200 |
The 2019 HSA catch-up contribution amount for those 55+ on December 31, 2019, remains $1,000 (this amount is fixed by statute).
