The
savings limits for the ever-popular health savings accounts (HSA) are set for
2022. The new limits are outlined here with current year amounts noted for
comparison. So plan now for your contributions.
What
is an HSA?
An
HSA is a tax-advantaged savings account whose funds can be used to pay
qualified health care costs for you, your spouse and your dependents. The
account is a great way to pay for qualified health care costs with pre-tax
dollars. In fact any investment gains on your funds are also tax-free as long
as they are used to pay for qualified medical, dental or vision expenses.
Unused funds may be carried over from one year to the next. To qualify for this
tax-advantaged account you must be enrolled in a high-deductible health plan
(HDHP).
The
limits
Note: An HDHP
plan has minimum deductible requirements that are typically higher than
traditional health insurance plans. To qualify for an HSA, your coverage must
have out-of-pocket payment limits in line with the maximums noted above.
The key is to
maximize funds to pay for your medical, dental, and vision care expenses with
pre-tax money. By building your account now, you could have a next egg for
unforeseen future expenses.