You must be enrolled in the High Deductible Health Plan (HDHP) medical insurance option and meet all other eligibility criteria defined by the Internal Revenue Service to make contributions to a Health Savings Account (HSA).
Annual Contribution Limits
For 2024, the annual IRS limits are:
- Employee only HDHP coverage - $4,150
- Family HDHP coverage - $8,300
In 2023, the annual IRS limits on HSA contributions were:
- Employee only HDHP coverage - $3,850
- Family HDHP coverage - $7,750
Individuals age 55 and older may be eligible to contribute up to an additional $1,000. The IRS defines “family” coverage as "qualifying HDHP insurance that covers an employee and at least one dependent (e.g., spouse, domestic partner, dependent child)."
Making Pre-Tax Contributions
You may specify a regular contribution to be deducted from your paycheck. This contribution will be made before Social Security, federal, and most state income taxes are deducted. You can make changes to the amount you contribute to your HSA during the year by submitting a new Health Savings Account (HSA) Change of Contribution form.
Making After-Tax Contributions
You may choose to make all or part of your annual account contributions to your HSA by making "after-tax" contributions to your account. These contributions, which you can make by writing a personal check, may be deducted on your income tax return, using IRS Form 1040 and Form 8889.
Making "Catch-Up" Contributions
If you are 55 or older, covered by a qualified HDHP and meet all other IRS eligibility criteria, you can make catch-up contributions each year until you are enrolled in Medicare benefits. Annual catch-up contributions to a HSA are limited to $1,000 currently. If both spouses have HSAs, then each is permitted the full catch-up amount, provided they are covered by a qualified HDHP for the entire year.
Front-Loading Contributions
Contributions for a taxable year can be made in one or more payments at your convenience. Thus you could choose to make a single sum contribution at the beginning of the year so that HSA funds are available to use for health care expenses when needed.
Effect of FSA Balance During The Grace Period
Having a FSA balance available during the grace period (January 1 to March 15, 2024) is considered "other health coverage". If by December 31, 2023 you do not claim the remaining balance in your Health FSA, IRS rules stipulate that you will not be eligible to begin contributing to your HSA until April 1, 2024, the first month after the grace period ends.
Contribution Deadline For Tax Reporting
You have until April 15, 2024 to make contributions with respect to 2023 HDHP coverage. Contributions for a prior year cannot be made through the university's payroll deduction process. You will need to make the contribution with after-tax dollars and then list the contribution on your income tax return for the appropriate tax year.