HSA Contribution Limits 2019

HSA contribution limits for 2019 will increase, according to the Internal Revenue Service. The maximum contribution will go up $50 to $3,500 for individuals and $100 to $7,000 for families. Maximum catch-up contributions for people over age 55 remain at $1,000.

Do employer contributions count toward the HSA limit? Yes. The contributions by the employer and employee together can’t exceed the HSA contribution limits for 2019.

What Insurance Plans Qualify For HSA?

Account holders need to keep up with more than HSA contribution limits for 2019. Are you eligible to put money in an HSA?

To be eligible, HSA rules require you to have a qualifying high-deductible health plan, or HDHP, which is defined the same for 2019 as it was in 2018. To qualify, the insurance plan must have a deductible of at least $1,350 for individuals and $2,700 for families.

For 2019, maximum out-of-pocket costs for HSA qualified insurance plans also tick up $100 for individuals and $200 for families. They top out at $6,750 for individuals and $13,500 for families. Out-of-pocket expenses include deductibles and copays but not premiums.

HSA Rules 2019: State Taxes

The triple-tax benefit of having an HSA is that contributions are tax-deductible, the HSA account balance grows tax-free (at least at the federal level) and funds can be withdrawn without being taxed when used for HSA qualified expenses.

There are a few exceptions at the state level to this triple-tax advantage.

California and New Jersey do not offer tax-free contributions at the state level. HSA earnings are also taxable in California. HSA earnings may accrue from investing HSA funds.

Alabama eliminated similar rules on Jan. 1, 2018, and is now a HSA triple-tax advantage state.

Also, states without a state income tax do not provide a deduction for HSA contributions. Those states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

And HSA account holders may have to pay taxes on any interest, dividends or capital gains earned in their HSAs in New Hampshire and Tennessee.

Pending Legislation On HSA Rules

The House of Representatives passed two HSA-related bills in 2018, but the Senate has yet to vote on them. Generally, the bills expand eligibility, HSA contribution limits and allowable expenses. For example, they would allow more flexibility with first-dollar coverage, or medical expenses that are not subject to the deductible, thus enabling more high-deductible plans to qualify for HSAs. Certain expenses related to sports and fitness would be eligible for reimbursement. The bills also would allow HSA-eligible working seniors enrolled only in Medicare Part A to contribute to their HSAs.