Health Savings Accounts (HSAs)

If you have a high deductible plan ($1200 per covered individual and $2400 per family for 2011), you can set up a Health Savings account, fund it with after tax dollars, and deduct the amount from your taxable income at tax time.

(To protect your health and wealth, you'll need to know the ins and outs of HRAs, HSAs and FSAs. Here's help from Forbes)

You have until the 15th of April, 2013 to fund the account for 2012. The money accrues tax free, and can be used for eligible medical expenses, including dental, eye glasses, prescriptions, doctor visits, etc.

The funds can be accessed to pay eligible medical expenses with a check or a debit card. If you don’t use these funds, they accrue year by year, and upon your death go to your heirs ( no “use it or lose it” like flexi-plans).


For 2012, the annual contribution is capped at $3050 for an individual and $6150 for a family. There is an annual “catch-up” of $1000 for individuals older than 55; that is, if you are over 55 the maximum is $7150 for your family or $4050 per individual.

Maximum out of pocket amounts (deductibles, co-payments, and other amounts, but NOT premiums) are also capped at about $6000 for an individual or about $12,000 for a family.

If you are eligible, you can set up this account at your personal bank or credit union.

It is uncertain what will happen to HSA contribution limits in the future.  Take advantage of the opportunity to set up an HSA now.