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Home » Health, Health Insurance, HSA's

Maximum HSA Contributions Increased for 2015

Last updated by on 10 Comments

The IRS recently (and quietly) published an inflation adjustment increase to the maximum HSA contribution for 2015 over 2014’s maximum.

If you’ve been following along, you know that I have been a big fan of health savings accounts (HSA’s) over the last few years – fully maxing them out. Why? HSA’s are like IRA’s on steroids (tax-free steroids at that). They offer users pre-tax contributions, tax-free investment gains, and tax-free distributions to pay for eligible health care expenses.

With HSA’s, you own the account. It goes with you and can be used regardless of future employment status or health plan. This is not the case with FSA’s, which are tied to your employer.

All benefits aside, your ability to annually contribute to an HSA is determined by whether or not you are enrolled in a high deductible health plan (HDHP), as they are defined by the IRS. For 2015, HDHP’s will be classified as plans that have:

  • A minimum annual deductible of at least $1,300 for individual coverage (up from $1,250 in 2014) or $2,600 for family coverage (up from $2,500 in 2014); and
  • Annual out-of-pocket expense maximums (e.g., deductibles, co-payments, and other amounts, but not premiums) up to $6,450 for individual coverage¬†(up from $6,350 in 2014) or $12,900 for family coverage (up from $12,700 in 2014).

Take this in to consideration when open enrollment comes around this fall.

Here are the maximum HSA contribution amounts for 2014 and 2015…

maximum HSA contribution2014 Maximum HSA Contribution Limits

  • ¬†Individual Plan: $3,300
  • Family Plan: $6,550

2015 Maximum HSA Contribution Limits

  • Individual Plan: $3,350 (+$50)
  • Family Plan: $6,650 (+$100)

HSA Catch-Up Contribution Amount

Similar to IRA’s and 401K’s, there are catch up contributions for those age 55 and over. The HSA catch-up contribution is $1,000 for both individual and family plans for both 2014 and 2015.

The Case for Maxing Out

In most cases, you’ll have to decide your HSA contributions for the following year during your open enrollment. Your employer will usually let you contribute a specified amount evenly across all pay periods.

Some employers will allow you to make larger contributions towards the end of the year, but you’ll have to check with your HR department.

Here’s why you should consider contributing as much as you can to an HSA. If you are young and healthy, health care costs will eventually catch up with you.

HSA’s allow you to build a significant cushion to protect yourself from future costs. Why pay for health care costs with after-tax dollars if you could pay with pre-tax dollars?

When you turn 65, you can use HSA funds on not just medical expenses, but anything, without penalty (non-medical expenses are taxed like Traditional IRA distributions) – so there’s little downside to contributing too much.

And remember, the entire time, you can grow your contributions through investments, just like any other retirement account.

Your employer may also make tax-free contributions to your HSA, if you are enrolled in their HDHP offering.

If all of that sounds appealing and you’re interested in more on HSA’s, check out the previous links in this article or IRS publication 969. Also, check out my list of the best HSA accounts if you’ve left an employer and want to move your current HSA to a new one (fees do vary quite a bit).

HSA Discussion:

  • Will you be maxing out your HSA this year or next year?
  • Have you moved away from HDHP/HSA’s now that ACA changes have taken effect?

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


10 Comments »
  • Ron Ablang says:

    I am already maxing out my contributions for 2014, and I will increase it to the new max in October for 2015, which will make it $277.08 per paycheck (up from $272.91). You can’t really feel $5-$6 per paycheck.

  • BKey says:

    An excellent article explaining the benefits of maxing out on one’s HSA. It is correct that after age 65, an individual can use HSA funds for any expense without penalty. However, one must pay normal income taxes on any distribution not used for medical expenses.

  • Sipoy Mutiny says:

    GE,

    Thanks for keeping the readers informed. Every pre-tax dollar saved is great! Then you get to choose investments to put in the stock market thru mutual funds…I have maxed out HSA contributions for the last 4 years and have it invested in Vanguard Wellington Fund, a balanced fund, as I don’t want to carry too much risk for this safety net which is specifically to cover Healthcare costs in case anything happens to me or my family members.

    Cheers,
    Sipoy

  • Retired by40 says:

    Not a huge increase, but with the ACA taking effect, this will definitely help! Thanks for writing about stuff like this…honestly, if I didn’t read your blog I probably wouldn’t seek out the information for myself…lol

  • Rob says:

    Fees are definitely an important part of the equation. Not sure how portable HSA dollars are, but some financial companies can definitely gouge you with fees. I found the process to invest those dollars very vague and hard to understand. Great investment vehicle, I think they just need to be better understood.

  • Mark L. says:

    I also contributed the maximum for 2014 and intend to do so in 2015. However, one question I have – Why are catch-up contributions set for persons age 50+ via 401(K) plans and for HSA’s it’s age 55+? Shouldn’t the IRS set the same standard for HSA’s as they do for 401(K) plans? Just saying…

  • Jim S. says:

    My employer will contribute up to $800 to my HSA if I meet certain healthy habits. Do I have to reduce my maximum family contributions down to $5,850, or can I still contribute the max tax free in addition to the $800?

  • BKey says:

    Yes, you do have to reduce your own contribution so that the total is no more than $6450 for the year 2015.

  • BKey says:

    Sorry, contribution limit for 2015 is $6650 unless age 55 or older in which you can add an extra $1000 to the total.

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