Health Savings Account (HSA) contribution limits will be unchanged in 2011, staying at the same levels as 2010. This is the first year since HSA’s were created where there was no change. Since the Consumer Price Index has been relatively flat due to the economy there was no need for a change.
Individuals for 2010 and 2011 can deposit up to $3,050 into their HSA’s. Family’s can deposit up to $6,150 into their Health Savings Accounts for the 2010 and 2011 tax years. Catch up contributions for those 55 years old and older are staying at $1,000 for 2010 and 2011.
A new study showed that 10 million individuals are now covered under HSA qualified health insurance plans, an increase of 25% over the previous year. The laws authorizing Heath Savings Accounts remain intact, even after the sweeping changes of the new health reform bill signed into law by President Obama on March 23rd of 2010.
However penalties for non-qualified withdrawals after January 1st, 2011 are increasing from 10% to 20%. Also starting in 2011, a penalty may be charged for over the counter medications unless prescribed by a doctor. Please visit our Health Savings Account – HSA – Resource Center for more information.
In terms of “over the counter medications unless prescribed by a doctor”, I was wondering what else this implies. I currently purchase health-related products such as toothpaste, bandaids, FirstAid-type products such as Hydrogen Peroxide and Neosporin, feminine products, cough/cold medicine, etc. Will these things all be penalized starting in 2011?
Yes, it is my understanding that these could only be allowable if prescribed by a doctor.
Bandages are supposed to continue to be HSA qualified, but I don’t think anything else on your list would be, unless prescribed by a doctor.