Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: July 6, 2007             No. 15

 

Health Savings Account Parameters Now UpdatedText Box:

The Tax Relief and Health Care Act of 2006 (H.R. 6111), signed into law on December 20, 2006, included some modifications to health savings account (HSA) provisions. Included in this were changes to the way the cost-of-living adjustments are computed for the HSA amounts, and that these adjustments must be published by the Internal Revenue Service by June 1 of the preceding year. As a result, the amounts for 2008 are now available. Here are the amounts for both 2007 and 2008: 

Calendar Year 2007 

Component

Single Coverage

Family Coverage

Minimum deductible of health plan

$1,100

$2,200

Annual out-of-pocket limit

$5,500

$11,000

Maximum HSA contribution

$2,850

$5,650

 Calendar Year 2008 

Component

Single Coverage

Family Coverage

Minimum deductible of health plan

$1,100

$2,200

Annual out-of-pocket limit

$5,600

$11,200

Maximum HSA contribution

$2,900

$5,800

 Remember that, starting in 2007, the maximum annual HSA contribution is no longer limited to the amount of the deductible for the plan. If the plan deductible is lower than the maximum contribution allowed, employees may now contribute the additional amount to their HSAs. 

Also remember that California law still does not yet allow the income tax advantage for HSA contributions like federal law does, which we hope will change soon. 

—Sheila G. Vickers