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Small Business Employee Benefits and HR Blog

2014 HSA Contribution Limits

An HSA (or Health Savings Account) is a tax-advantaged savings account that belongs to you and is paired with a qualified high-deductible health plan (HDHP). You can make HSA contributions for the 2014 tax year until April 15, 2015. Maxing out the 2014 HSA limit set by the IRS will reduce the amount the employee pays in federal income tax.

2014 HSA Contribution Limits

  HDHP Minimum Deductible HDHP
Maximum
Out-of-Pocket
HSA
Contribution Limit
HSA 55+ additional contribution amount
Single $1,250 $6,350 $3,300 $1,000
Family $2,500 $12,700 $6,550 $1,000

Compared to the 2013 HSA contribution limits:

  • The HDHP minimum deductible did not change.
  • The HDHP maximum out-of-pocket amount increased $100 for a single, and increased $200 for a family.
  • The HSA contribution limit increased $50 for single, and increased $100 for a family.
  • The "catch-up" amount for those age 55+ did not change.hsa_contribution_limits_2014

If you use an HSA to pay for unqualified medical expenses in 2014, the tax penalty is 20% of the HSA distribution.

Once deposited, all HSA contributions belong to the individual, regardless of who made the contribution. As such, any distribution and/or removal of funds from the HSA has to be authorized by the individual (not the employer). Many other requests related to the account (such as a request for a new debit card or request for an address change) can only be made by the individual.

The 2014 HSA rules and regulations were released in IRS Revenue Procedure 2013-25 (source).

Background on HSAs

A Health Savings Account, or HSA, is a financial account established by an individual or family to pay for qualified medical expenses. U.S. federal regulations require you to have a minimum deductible on your health insurance plan in order to make tax-deductible contributions to a Health Savings Accounts (HSA).

HSAs combine the benefits of both traditional and Roth 401(k)s and IRAs for medical expenses. Taxpayers receive a 100% income tax deduction on annual contributions, they may withdraw HSA funds tax-free to reimburse themselves for qualified medical expenses, and they may defer taking such reimbursements indefinitely without penalties.

HSAs are explained in IRS Publication 969.

Additional HSA Resources

The Comprehensive Guide to the Small Business HRA

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