2 minutes reading time (444 words)

High-Deductible Medical Plans

health-savings-account

If you are in very good health, a high-deductible medical plan is an excellent way for you to cut your healthcare costs. Firstly, (and most obvious) it brings down your monthly premium. But, did you know that most of these plans can be coupled with a Health Savings Account (HSA)? You can save up to $3,450 (as an individual) for 2018. This gives us yet another avenue to save toward debts or toward your retirement. It is critical to any financial plan that individuals take advantage of any and all programs that fit their situation.

Year
Contribution Limit
(Single)
Contribution Limit
(Family)
Additional Catch-Up Contribution
(55 or older, Single and Family)
2018
$3,450
$6,900
$1,000
2017
$3,400
$6,750
$1,000

Limit on Contributions

  • The contribution amount to an HSA can depend on the type of HDHP coverage you have, your age and the date you become an eligible individual, and the date you cease to be an eligible individual.
  • If you were, or were considered (under the last-month rule), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your coverage.
  • If you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of:
    1. The limitation shown on the Line 3 Limitation Chart and Worksheet in the Instructions for Form 8889
    2. The maximum annual HSA contribution based on your HDHP coverage (single or family) on the first day of the last month of your tax year (usually Dec. 1).

  • Last-month rule: If you are an eligible individual on the first day of the last month of your tax year (usually Dec. 1), you are considered an eligible individual for the entire year.
    • Under the last-month rule, you must remain an eligible individual during the testing period. The testing period begins with the last month of your tax year, and ends on the last day of the twelfth month following that month (e.g. Dec. 1, 2017 - December eligibility, 2018).
    • If you fail to maintain eligibility, the total contributions made to your HSA(except for the last-month rule) will be included as income in the year in which you fail to be eligible. The amount is also subject to a 10% additional tax.

  • Contribution amounts must be reduced by any amount contributed to an Archer MSA in the same tax year. This includes employer contributions to your Archer MSA.
  • Contributions cannot be made if you are on Medicare.

As always, we are here to help. Contact us today to discuss more about how high-medical deductible plans can fit into your overall financial plan.

End of Life and Incompetency Planning
Seasonal Cleaning and the New Year
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Tuesday, 11 August 2020

By accepting you will be accessing a service provided by a third-party external to https://www.attentiveinv.com/

Due to renewed State orders for shelter-in-place we will be modifying our office operations. We will be suspending services at our physical office for the public. However, we are available to you via web meeting (zoom), email and telephone (Phone lines have been forwarded to our personal cell phones) during regular business hours. We will be able to fully service all your investment needs with no interruption.

You may drop contribution checks at our office through the mail slot or they may be mailed directly to TD Ameritrade (address listed below). Please be sure to notate your account number on the check.

TD Ameritrade
PO BOX 650567
Dallas, TX 75265-0567

Rest assured that we will continue to monitor your investments and market conditions on an ongoing basis with no interruption. Should you have any questions or concerns please feel free to contact us.

We will navigate this crisis as best we can, coming together and making shared sacrifices. We hope that we can help to slow down the effect of this virus together and solve this swiftly. We also wish everyone well and would like to extend our gratitude for your patience during these trying times. Continue to watch for updates from us.