Understanding HSA Rules for 2018 - Everything You Need to Know

When it comes to Health Savings Accounts (HSAs), it's essential to stay informed about the rules that apply in a given year. For 2018, there are specific guidelines and regulations that HSA account holders need to be aware of to maximize the benefits of their account. Here are the key rules for HSA in 2018:

1. Contribution Limits:

• Individuals can contribute up to $3,450, and families can contribute up to $6,900 in 2018.

2. Eligibility Criteria:

• To qualify for an HSA, you must be enrolled in a high-deductible health plan (HDHP) and not be covered by another health plan that is not an HDHP.

3. Catch-up Contributions:

• Individuals aged 55 and older can make an additional catch-up contribution of $1,000.

4. Tax Benefits:

• Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free.

5. Rollover of Funds:

• Unlike Flexible Spending Accounts (FSAs), funds in an HSA roll over from year to year, allowing for long-term savings.

6. Qualified Medical Expenses:

• Expenses like doctor visits, prescriptions, and certain medical supplies are eligible for HSA funds.

7. Penalty for Non-Qualified Expenses:

• Using HSA funds for non-qualified expenses before age 65 incurs a 20% penalty in addition to regular income tax.

Staying informed and following these rules ensures that you get the most out of your HSA in 2018. By understanding the regulations and maximizing your contributions, you can enjoy the tax advantages and savings benefits that an HSA offers.

Understanding the rules of Health Savings Accounts (HSAs) is crucial for anyone looking to maximize the benefits in their healthcare financing. In 2018, these rules included contribution limits that allow individuals up to $3,450 and families up to $6,900 to save for their future healthcare expenses.