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HSA
- Health Savings Accounts in Oregon
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HSA Eligible Plans:
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| ODS HSA Choice | ODS HSA Value | PacificSource
| Regence
General
The new year brings new limits on maximum HSA contributions for qualified high-deductible health plans (HDHPs).
In addition, President Bush signed HSA
legislation in 2006 that has a positive impact for all HSAs. The highlights
of this legislation include:
- Allowing people to take their health savings accounts with them if they
move from job to job.
- Raising contribution limits and allowing for a one-time transfers from IRA
accounts.
- Allowing a contribution up to an annual limit of $2,900, regardless of the
deductible for their insurance plan.
- Allowing the option to fully fund their HSAs regardless of what time of
year they sign up for the plan
Eligibility
- Individuals under the age of 65 are eligible to contribute to an HSA if
they have a qualified health plan.
- For self-only policies, a qualified health plan must have a minimum
deductible of $1,100 with a $5,600 cap on out-of-pocket expenses (indexed
annually).
- For family policies, a qualified health plan must have a minimum deductible
of $2,200 with a $11,200 cap on out-of-pocket expenses (indexed annually).
- Preventive care services are not subject to the deductible. In addition,
coverage for accidents, disability, dental care, vision care, and long-term
care is not subject to the deductible.
Contributions
- Contributions are allowed up to 100% of the health plan deductible. The
maximum annual contribution is $2,900 for self-only policies and $5,800 for
family policies (indexed annually).
- Individuals age 55 65 may make additional catch- up contributions
of up to $900 in 2008, increasing to $1,000 annually in 2009 and thereafter.
A married couple can make two catch- up contributions as long as both spouses
are at least 55. Catch-up contributions will help individuals accumulate assets
for retiree health expenses.
- Contributions may be made by individuals, family members and employers.
- Contributions made by individuals and family members are tax-deductible
(for the account beneficiary) even if the account beneficiary does not
itemize. Employer contributions are made on a pre-tax basis and are not
taxable to the employee. Employers will be allowed to offer HSAs through
a cafeteria plan.
- Investment earnings accrue tax-free.
Distributions
- HSA distributions are tax- free if they are used to pay for qualified medical
expenses, such as:
- Amounts paid for the diagnosis, cure, mitigation, treatment or prevention
of disease,
- Prescription drugs,
- Qualified long-term care services and long-term care insurance,
- Continuation coverage required by Federal law (i.e., COBRA),
- Health insurance for the unemployed,
- Medicare expenses (but not Medigap), and
- Retiree health expenses for individuals age 65 and older (Note: retiree
health plans would not have to meet the $1,100/$2,200 minimum deductible
requirements.)
- Distributions made for any other purpose are subject to income tax and a
10% penalty. The 10% penalty is waived in the case of death or disability.
The 10% penalty is also waived for distributions made by individuals age 65
and older.
Treatment at Death
- Upon death, HSA ownership may transfer to the spouse on a tax-free basis.
Effective Date
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