Do HSA Contributions Need to Be Elected Annually?

Health Savings Accounts (HSAs) have become a popular way for individuals to save for medical expenses while enjoying tax benefits. One common question that arises is whether HSA contributions need to be elected annually.

Contributions to an HSA do not need to be elected annually. You can choose to contribute a set amount each month or make periodic contributions throughout the year, as long as you stay within the annual contribution limits set by the IRS.

Here are some key points to consider about HSA contributions:

• Contributions can be made by you, your employer, or both.
• Contributions are pre-tax or tax-deductible, reducing your overall taxable income.
• Unused contributions roll over from year to year, unlike FSAs (Flexible Spending Accounts).
• Contribution limits are set by the IRS each year and may change.

It's important to keep track of your HSA contributions to ensure you are not exceeding the annual limits. Electing to contribute automatically from your paycheck can be a convenient way to consistently save for medical expenses.

Many individuals wonder if they need to reevaluate their contributions to their Health Savings Accounts annually, especially given the tax benefits. The good news is, you don’t have to elect your HSA contributions each year.