The Health Opportunity Patient Empowerment Act of 2006, part of the Tax Relief and Health Care Act of 2006, provides new opportunities for those who participate in Health Savings Accounts (HSA) to build their account funds.
HSA Trustee Services, a leader in the HSA market, advises people to fully fund their accounts before any other tax-advantage accounts, such as an IRA or 401K, because the HSA funds are always accessible to the participant and family dependents for qualified health care expenses while still receiving tax benefits.
"Ever since passage of the new law, we have received calls from our current customers wanting to know how much they could add for 2007," said Viki Morales, Senior VP of HSA Trustee Services. "People are excited to hear that they can increase their contributions up to the Treasury cap even if they have a lower deductible."
Changes to HSA contributions for 2007 include:
1. Contributions are no longer limited to the lesser
of the deductible or the Treasury Cap. Everyone can
contribute the Treasury Cap Limit and this applies
to both new and existing accounts.
2. The 2007 Treasury Cap is $2850 for individuals and
$5650 for families. (indexed annually)
3. Anyone who is 55 years or older anytime in 2007 may
contribute an extra $800 as a catch-up contribution.
4. As of now, no matter when during the year you get
the qualified insurance, you are eligible to
contribute the Full Treasury Cap listed above with
no more pro-rating of contributions.
5. There is no more pro-rating of catch-up
contributions. Same rules as above apply.
"The new legislation allows people to build their account balances to save for future qualified expenses. It truly allows people to plan ahead for spending on such things as dental care, orthodontics and other discretionary care," adds Morales.
HSA Trustee Services is a nationwide provider specializing in opening HSA accounts for individuals, families and groups since the 2004 inception of the program. They were the first provider to offer a "no monthly fee" HSA which includes their exclusive "HSA Rx Card" for further savings on prescription drugs.