Contributing to an HSA Account
For 2024, the maximum you may contribute to a Health Savings Account (HSA) is $4,660 for single coverage or $7,300 for family coverage. There is no minimum contribution amount required by the IRS, but your HSA administrator might require a minimum initial payment.
Catch-Up Contributions
The designers of HSA legislation were concerned these plans would favor younger people with more years to set aside savings so a “catch up” provision was included. HSA holders age 55 and older may make additional annual contributions of $1,000.
Employer Contributions
An employer may contribute to an employee’s Health Savings Account (HSA), but the employer must make available comparable contributions on behalf of all “comparable participating employees.” Contributions are considered comparable if they are the same amount or same percentage of the HSA-compatible high deductible health plan. Employer contributions to HSAs are deductible Health and Welfare expenses and generate no taxable income to employees as long as the discrimination guidelines are not violated.
Contribution Frequency and Deadlines
How often you contribute to your HSA is up to you. You can make a lump sum contribution for the year, monthly deposits, or random contributions through out the year. HSA contributions must be made before the April 15th tax deadline to be included in that year’s income tax statement. So, for 2022, contributions must be made on or before the April 15th, 2021 filing deadline. Employer contributions to HSAs are deductible Health and Welfare expenses and generate no taxable income to employees as long as the discrimination guidelines are not violated.
Rollovers and Transfers
Rollover contributions from Archer MSAs and other HSAs are permitted, and are not subject to the annual contribution limits. Employers can also transfer funds from a Health Reimbursement Arrangement (HRA) or Flexible Spending Account (FSA) to an HSA for employees switching to coverage under an HSA-compatible plan. These rollover amounts are not subject to the annual contribution limits.
You can make a one-time contribution to an HSA of amounts distributed from an Individual Retirement Account (IRA). Generally, the IRA transfer is limited to once per lifetime, and the contribution must be made in a direct trustee-to-trustee transfer.