Changes to HSA contributions were recently released for 2025. If you are an individual contributing to your own HSA or have a plan supported through your employer, you are going to want to plan ahead for 2025. These changes will affect your health savings account (HSA). Plan for 2025 and get the most out of your HSA benefits.
Why are HSA Limits Changing for 2025?
The IRS announced in May 2024 that the contribution limits for health savings accounts (HSAs) will increase for 2025 due to inflation adjustments.
The contribution limits for health savings accounts (HSAs) in 2025 are $4,300 for individuals with self-only coverage and $8,550 for individuals with family coverage. How has that changed? For individuals it is an increase of $150 per year. For families their available increase is $250.
The maximum contribution, however, can vary depending on a multitude of conditions such as age and when an individual becomes eligible.
How Do I Know If I am HSA Eligible?
To know if you or your family qualify for a Health Savings Account (HSA), you must meet several different requirements.
- Have a Qualified high-deductible health plan (HDHP) on the first day of the month
- Do not have coverage by another health insurance plan (unless a plan that is specifically qualified for it.)
- Not be enrolled in Medicare
There are yearly limits for deposits into a Health Savings Account (HSA). Amounts are adjusted yearly for inflation. For more information about HSA-eligible plans also called High Deductible Health Plans (HDHPs), including both the minimum and maximum yearly deductible, from the IRS.
How Do You Contribute to an HSA?
To contribute to your HSA, any eligible individual can contribute funds. In addition, for an employee’s HSA, the employee, the employee’s employer, can all contribute to the employee’s HSA. In the same year.
A self-employed or unemployed person with an HSA can contribute funds to the account. In addition, even family members or any other person can make contributions on behalf of an eligible individual.
Contributions to an HSA must be made in cash. Contributions of stock or property aren’t allowed.
Is an HSA Account Tax Free?
Any interest or earnings on the assets in the HSA are tax-free while held in the account. However, qualifying individuals can receive tax-free distributions from your HSA. These distributions can include interest or earnings, to either pay or be reimbursed for qualified medical expenses you incur after you establish the HSA.
When Can You Contribute to an HSA?
Individuals can make contributions to your HSA for 2024 through April 15, 2025. If you fail to be an eligible individual during 2024, you can still make contributions through April 15, 2025, for the months you were an eligible individual. Your employer can make contributions to your HSA from January 1, 2025, through April 15, 2025, that are allocated to 2024. Your employer must notify you and the trustee of your HSA that the contribution is for 2024. The contribution will be reported on your 2024 Form W-2, Wage and Tax Statement.
How Can AUI help you with your HSA Questions?
Understanding the requirements of your HSA account may take some help from a health insurance expert. Whether you are looking into an HSA for the first time, or you are a seasoned user with questions on the new requirements AUI is here to help. Contact Us today to learn more about all of your options.
