The 2016 limits on contribution and out-of-pocket spending amounts for Health Savings Accounts (HSAs) and for the High-Deductible Health Plans (HDHPs) were increased again this year by the IRS. The IRS provided the inflation-adjusted HSA contribution, HDHP minimum deductible and out-of-pocket limits for 2016. The higher rates reflect the cost-of-living adjustment and rounding rules of Internal Revenue Code section 223.
A comparison of the 2015 and 2016 limits is shown below:
Here are some important points regarding HSAs and the Patient Protection and Affordable Care Act:
HSA penalties for nonqualified expenses
Effective Jan. 1, 2011, the penalty for using HSA funds for nonqualified medical expenses for those under the age of 65 (unless totally and permanently disabled) increased from 10 percent to 20 percent of the funds used for nonqualified expenses. Funds spent for non-qualified purposes also are subject to income tax.
For more information or answers to your insurance questions, contact us at Allan Block Insurance Agency, www.ambins.com, located in Tarrytown, NY in the heart of Westchester County, a key business district near New York City. We write auto, home, renters, condo, co-op, personal, business, life and group insurance for clients locally and in NYC, CT, NJ, PA, MA and many other states. The Professional Agency with the Personal Touch.