The Internal Revenue Service has released the 2011 limits for health savings accounts (HSAs) and for high-deductible health plans (HDHPs), to which HSAs must be linked. The amounts for 2011 are unchanged from 2010.

In Revenue Procedure 2010-22, issued on May 24, 2010, the IRS provides the inflation-adjusted HSA contribution and HDHP minimum deductible and out-of-pocket limits for 2011. Under the cost-of-living adjustment and rounding rules of Internal Revenue Code section 223, the 2011 amounts are unchanged from the amounts for 2010. The 2011 amounts are shown below.

2011 Limits for Health Savings Accounts and High-Deductible Health Plans

HDHP minimum deductible amounts

Individual: $1,200
Family: $2,400

HDHP maximum out-of-pocket amounts

Individual: $5,950
Family: $11,900

HSA statutory contribution amount

Individual: $3,050
Family $6,150

HSA catch-up contributions (age 55 or older)

$1,000

HSA/HDHP Market Growth

HSA holders own the assets in the accounts and can build up substantial sums over time.  Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.

HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.

Between January 2009 and January 2010, the fastest growing market for HSA/HDHP products was large-group coverage, which rose by 33 percent, followed by small-group coverage, which grew by 22 percent.

30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the       remaining 20 percent were in the individual market.

States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois and Minnesota

HSA Advantages:

Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.

Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.

Tax Free Money allowed for non traditional Medical coverage– As per IRS Publication 502, unused moneys can be used  for dental,vision, lasik eye surgery, acupuncture, yoga, infertility etc.  Popular Examples

Portability – The funds belong to you, so you keep the funds if you change jobs or retire.

Our overall experience with HSAs have been positive  when employer funding is at minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money).  Traditional plans trend of higher copays and new in network deductibles has also led to the popularity of an HSA.

For more customized information and how to navigate this please contact us:

Millennium Medical Solutions Corp.

200 Business Park Drive

Armonk, NY 10504

914-207-6161

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