Open Enrollment: HSA Plans

It’s that time of the year when employees have options to make changes to their benefits. One benefit to not overlook, if available, is your HSA plan. It is well worth it to take advantage of a Health Savings Plan (HSA Plan) if offered by your employer. The max allowed to save for 2023 is $3,850 for an individual and $7,750 for a family. If you are age 55 or older (and not enrolled in Medicare), you can contribute an additional “catch-up contribution” of $1,000 annually. Building up an HSA plan each month then allows you to pay for your medical expenses from untaxed money because the money goes into your HSA account pre-taxed. And if you don’t need to spend it all on your healthcare expenses then you can save it year to year and at age 65 can withdraw it to spend it however you would like, without any penalties. The funds grow tax-free so you are never taxed on them! In this way, it becomes another “bucket” to save for both health-care expenses and retirement.

Even if you can only save $1, $5, or $20 a month in your HSA account, that is $1, $5, or $20 month you won’t be taxed on when you spend it for your healthcare - money you will have to spend either way. FYI, if you want to set up a monthly contribution to max your 2023 HSA savings as an individual over a 12-month period, then plan to have an auto withdrawal from your paycheck for $320.83 a month to fund your HSA account. If paid in 24 semi-monthly pay periods that would be $160.42 per paycheck. If paid in 26 bi-weekly pay periods that would be $148.08 per paycheck. If you want to set up a monthly contribution to max your 2023 HSA savings for your family (who is on your insurance plan) over a 12-month period, then plan to have an auto withdrawal from your paycheck for $645.83 per month. If paid in 24 semi-monthly pay periods, that would be $322.92 per paycheck. If paid in 26 bi-weekly paychecks, that would be $298.08 per paycheck. If you are age 55 or older and not on Medicare, and want to max your additional annual contribution, then you can add an additional $83.33 each month (on top of your individual or family contribution). If you are paid in 24 semi-monthly pay periods, that would be an additional $41.67 per paycheck (on top of your individual or family contribution). If you are paid in 26 bi-weekly pay periods, that would be an additional $38.46 per paycheck (on top of your individual or family contribution).

For 2024, HSA contribution limits will go up to $4,150 (a $300 increase) for individuals and up to $8,300 (a $550 increase) for family coverage. The 55 and older “catch-up contribution” will remain the same at $1,000. So if you are planning ahead for maxing out 2024 contributions as an individual, you will want to set up automatic contributions of $345.83 per month. If paid in 24 semi-monthly pay periods that would be $172.92 per paycheck. If paid in 26 bi-weekly pay periods that would be $159.61 per paycheck. If you want to set up a monthly contribution to max your 2024 HSA savings for your family (who is on your insurance plan) over a 12-month period, you will want to set up automatic contributions of $691.67 per month. If paid in 24 semi-monthly pay periods, that would be $345.83 per paycheck. If paid in 26 bi-weekly paychecks, that would be $319.23 per paycheck. If you are age 55 or older and not on Medicare, and want to max your additional annual 2024 contribution, then you can add an additional $83.33 each month (on top of your individual or family contribution). If you are paid in 24 semi-monthly pay periods, that would be an additional $41.67 per paycheck (on top of your individual or family contribution). If you are paid in 26 bi-weekly pay periods, that would be an additional $38.46 per paycheck (on top of your individual or family contribution). An HSA plan allows you to spend less (by using untaxed money) on your ever-growing healthcare costs. Let us know if you have any questions about whether opting for an HSA plan is right for you. 

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Financially Fit Employees