|
 |
2011 HSA legislative changes
Health care reform includes a few important changes to HSAs which go into effect January 1, 2011.
- Over-the-counter (OTC) medicines and drugs will no longer be eligible for tax-free reimbursement from an HSA without a doctor’s prescription. This includes pain relievers, sleep aides, and cough medicines.
- Certain OTC purchases, such as insulin, bandages, and medical devices, continue to be eligible for tax-free purchase from an HSA without a prescription. Accountholders should always keep their receipts and save doctor’s prescriptions for OTC purchases with their tax records.
|
- The tax penalty for non-qualified distributions from an HSA will increase from 10 percent to 20 percent (for accountholders under age 65 and not disabled).
- Family insurance coverage may be extended to children up to age 26 but HSA distributions can only be made for qualified expenses incurred by tax dependents. If a tax dependent is listed on an accountholder’s federal income tax, typically their qualified expenses can be paid from the HSA.
Communications to accountholders
Wells Fargo will be notifying employers and accountholders of these legislative changes in a number of ways.
- Letters mailed to employers in mid-November.
- Postcards mailed to accountholders in mid-November.
- Emails to accountholders and employers in early December.
- Monthly HSA statements will include messages on these changes in December, January, and February.
- Featured on wellsfargo.com/hsa is a flyer with a Q&A – just click "Health care reform impacts to HSAs." The flyer can be downloaded to share with your clients.
2011 contribution limits
The Internal Revenue Service (IRS) 2011 annual contribution limits for HSAs are the same as the 2010 annual contribution limits. The 2011 minimum deductible and maximum out-of-pocket limits for HSA-compatible health plans also remain unchanged.
| |
Tax year 2011 |
| HSA annual contribution limits |
Single – $3,050
Family – $6,150 |
| HSA catch-up contributions |
$1,000 per individual age 55 or older |
| Minimum deductible |
Single – $1,200
Family – $2,400 |
| Maximum out-of-pocket expenses |
Single – $5,950
Family – $11,900 |
|
|
|
|
