Beginning January 1st, here’s what eligible taxpayers can contribute to HSAs:
HSA Contribution Limits
- Individuals with self-only coverage: $4,300 (up from $4,150 in 2024)
- Individuals with family coverage: $8,550 (up from $8,300 in 2024)
- Catch-up contributions for individuals 55 and older: $1,000 (no change).
Note that the limits apply to individual contributions and employer contributions combined. If you and your employer contribute too much, you may face a tax penalty.
HDHP Guidelines
The IRS also announced new guidelines for HDHPs:
- Minimum annual deductible: $1,650 for self-only coverage, $3,300 for family coverage
- Maximum annual out-of-pocket expenses: $8,300 for self-only coverage, $16,600 for family coverage
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COLORADO HEALTH INSURANCE
What are HSAs and HDHPs?
HSAs are tax-advantaged accounts that allow you to save money for qualified medical expenses.
You can contribute pre-tax dollars to your HSA, and the money grows tax-free. You can also use HSA funds to pay for qualified medical expenses tax-free.
HDHPs are health insurance plans with lower premiums but higher deductibles. This means you pay more out-of-pocket for healthcare costs before your insurance kicks in. However, you can use your HSA to cover these costs.
Learn More: HSAs – An Underrated But Powerful Retirement Asset
Why Consider an HSA and HDHP?
HSAs and HDHPs can offer significant tax savings and flexibility.
You can contribute pre-tax dollars to your HSA, which reduces your taxable income. You can also use HSA funds to pay for qualified medical expenses tax-free, including deductibles, co-pays, and coinsurance.
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How to Get Started with an HSA and HDHP
If you want to learn more about HSAs and HDHPs, contact a Personal Benefits Manager (PBM).
They can help you determine if HSA is right for you and guide you through the enrollment process.
Disclaimer: This article is for informational purposes only and should not be considered tax advice. Please consult with a tax professional for personalized advice.
For Further Reading: Can I Use an HSA With a Health Sharing Plan in Colorado?|Colorado Healthshare Plans: The Best Health Care Cost Sharing Plans in the State [F.A.Q. & Overview] For 2024|HSA MEC A Powerful Way to Supercharge Your Health Share Plan
Wiley Long is the president of ColoHealth, and has been in the health insurance industry since 1987. He received his master’s degree in nutrition and exercise science at Colorado State University, and is passionate about individual healthcare freedom. Read more about Wiley on his Bio page.
