The Internal Revenue Service has issued guidance that for 2007, HSA contributions are tax-deductible up to either:

• $2,850 for single coverage
• $5,650 for family coverage

For 2008, HSA contributions are tax-deductible up to either:

• $2,900 for single coverage
• $5,800 for family coverage

Account holders age 55 and older may contribute an additional $800 per year in 2007. The additional amount will increase by $100 per year up to a cap of $1,000 in 2009, to help maximize the tax advantages. Account holders should consult a tax advisor for more information and/or advice on their specific circumstances.

How an HSA Works with an Annual Deductible Medical Plan
For 2007 and 2008, IRS guidance for the annual deductible medical plan accompanying the HSA is as follows:

• Minimum annual deductible: $1,100 for individual coverage.  $2,200 for family coverage
• Out-of-pocket maximum: No more than $5,500 for individual coverage, no more than $11,000 for family coverage
• The IRS will make appropriate inflation adjustments for 2009.

For more detailed information regarding eligible and ineligible expenses download the following PDF document.

  Eligible/Ineligible Expenses