John R. Levine wrote:

- quote -

Q-12. How much may be contributed to an HSA in calendar year 2004?

A-12. The maximum annual contribution to an HSA is the sum
of the limits determined separately for each month, based on
status, eligibility and health plan coverage as of the first
day of the month. For calendar year 2004, the maximum
monthly contribution for eligible individuals with self-only
coverage under an HDHP is 1/12 of the lesser of 100% of the
annual deductible under the HDHP (minimum of $1,000) but not
more than $2,600. For eligible individuals with family
coverage under an HDHP, the maximum monthly contribution is
1/12 of the lesser of 100% of the annual deductible under
the HDHP (minimum of $2,000) but not more than $5,150. In
addition to the maximum contribution amount, catch-up
contributions, as described in A-14, may be made by or on
behalf of individuals age 55 or older and younger than 65.
All HSA contributions made by or on behalf of an eligible
individual to an HSA are aggregated for purposes of applying
the limit. The annual limit is decreased by the aggregate
contributions to an Archer MSA. The same annual contribution
limit applies whether the contributions are made by an
employee, an employer, a self-employed person, or a family
member. Unlike Archer MSAs, contributions may be made by or
on behalf of eligible individuals even if the individuals
have no compensation or if the contributions exceed their
compensation. If an individual has more than one HSA, the
aggregate annual contributions to all the HSAs are subject
to the limit.

Q-13. How is the contribution limit computed for an
individual who begins self-only coverage under an HDHP on
June 1, 2004 and continues to be covered under the HDHP for
the rest of the year?

A-13. The contribution limit is computed each month. If the
annual deductible is $5,000 for the HDHP, then the lesser of
the annual deductible and $2,600 is $2,600. The monthly
contribution limit is $216.67 ($2,600 /12). The annual
contribution limit is $1,516.69 (7 x $216.67).

Q-14. What are the "catch-up contributions" for individuals
age 55 or older?

A-14. For individuals (and their spouses covered under the
HDHP) between ages 55 and 65, the HSA contribution limit is
increased by $500 in calendar year 2004. This catch-up
amount will increase in $100 increments annually, until it
reaches $1,000 in calendar year 2009. As with the annual
contribution limit, the catch- up contribution is also
computed on a monthly basis. After an individual has
attained age 65 (the Medicare eligibility age),
contributions, including catch-up contributions, cannot be
made to an individual's HSA.

--
Alan
http://taxtopics.net

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I'm trying to figure out what the 2004 limit on family
contributions to my new HSA (shortly to be rolled over from
my MSA) is. Several summaries say that it's the annual
deductible on my insurance policy up to $5150. But at least
one appears to say that the limit is the annual
out-of-pocket on the policy, which is not quite the same as
the deductible.

My policy has a $4500 deductible and then a 20% copay of the
next $5000. So is the contribution limit $4500 or $5150?

Regards,

John Levine, johnl[at]iecc.com, Primary Perpetrator of "The Internet for Dummies",
Information Superhighwayman wanna-be, http://iecc.com/johnl, Sewer Commissioner
"I dropped the toothpaste", said Tom, crestfallenly.

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