In a new Revenue Procedure (Rev Proc 2019-25, 2019-22 IRB), the IRS has provided the 2020 inflation-adjusted contribution,
deductible, and out-of-pocket expense limits for health savings accounts (HSAs).
HSA basics.
Eligible individuals may, subject to statutory limits, make deductible contributions
to an HSA. Employers and other persons (e.g., family members) also may contribute to an HSA on
behalf of an eligible individual. Generally, employer contributions are treated as employer-provided coverage for medical
expenses under an accident or health plan and are excludable from income.
In general, a person is an "eligible individual" if he or she is
covered under a high
deductible health plan (HDHP) and is not covered under any other
health plan, unless
the other coverage is permitted insurance (e.g., for worker's
compensation, a specified
disease or illness, or providing a fixed payment for
hospitalization). General purpose health accounts, such as flexible
spending accounts (FSAs) and health reimbursement arrangements (HRAs),
constitute "other coverage" that will usually preclude
HSA eligibility. However, exceptions apply for, among other
things, FSAs and HRAs that provide only
certain benefits, such as dental and vision, and those imposing
high annual deductibles.
HSA distributions not used to pay for qualifying medical expenses generally are included
in income and are subject to a 10% penalty tax.
Annual contribution limitations for 2020.
For calendar year 2020, the limitation on deductions under Code Sec. 223(b)(2)(A)
for an individual with self-only coverage under an HDHP is $3,550 (up from $3,500
for 2019). For calendar year 2020, the limitation on deductions under Code Sec. 223(b)(2)(B)
for an individual with family coverage under an HDHP is $7,100 (up from $7,000 for
2019).
HDHP for 2020. For calendar year 2020, an HDHP is defined under Code Sec. 223(c)(2)(A) as a health
plan with an annual deductible that is not less than $1,400 (up from $1,350 for 2019)
for self-only coverage or $2,800 (up from $2,700 for 2019) for family coverage, and
with respect to which the annual out-of-pocket expenses (deductibles, co-payments,
and other amounts, not including premiums) do not exceed $6,900 (up from $6,750 for
2019) for self-only coverage or $13,800 (up from $13,500 for 2019) for family coverage.
For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.
Review-Like-Follow AttorneyBritt On:
No comments:
Post a Comment