2011 HSA Limits Same as 2010

June 8, 2010

On May 24, 2010, the Internal Revenue Service (IRS) issued the inflation-adjusted limits for contributions to health savings accounts (HSAs) for calendar year 2011.  

The 2011 HSA limits will remain unchanged from 2010 levels because there were no changes in the Consumer Price Index that drives the cost-of-living adjustment. Annual limitations on deductibles for individual coverage under a high-deductible health plan are $3,050, while family coverage limits are $6,150.

High-deductible health plans are defined as a plan with an annual deductible that is not less than $1,200 and $2,200 for individual and family coverage, respectively.  Annual out-of-pocket limits also remain the same at $5,950 for individual coverage and $11,900 for family coverage.

The new health care law – the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148) – has several provisions that reference HSAs.

By January 1, 2011, PPACA excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through a health reimbursement account or health flexible spending account, and from being reimbursed on a tax-free basis through an HSA or Archer Medical Savings Account.  

At the same time, PPACA increases the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% (from 10% for HSAs and from 15% for Archer MSAs) of the disbursed amount.

Annual cost-sharing limits under the pending essential health benefits package (effective 2014) are also tied to current law HSA limits ($5,950/individual and $11,900/family in 2010 and 2011). Additionally, in 2018, employer contributions to HSAs will be used to determine the aggregate value of a health insurance plan with respect to ascertaining the excise tax on high-cost health insurance plans (i.e., “Cadillac health plans”).

For more information on the new health insurance law, go to NSBA’s Health Reform Today and Tomorrow Web site.