Health savings accounts (HSAs) have become an affordable healthcare option for a growing number of employees. Like many government programs, contribution limits are going to change in the new year.
As Dan Caplinger explains in The Motley Fool:
- Maximum contribution levels will go up, letting savers put more money aside in HSAs.
- Minimum annual deductible levels will stay at 2018 levels, allowing HSA participants to avoid having to cover more of their own primary healthcare costs before insurance coverage kicks in.
- Maximum out-of-pocket thresholds will also rise, potentially boosting the amount of financial responsibility for those who have high levels of healthcare spending.
“Health savings accounts offer taxpayers one of the most favorable ways to save money,” Caplinger writes. “With contributions that are tax-deductible and distributions that are tax-free as long as they’re used for qualifying medical expenses, HSAs offer a double benefit that you won’t find with IRAs, 401(k)s, or most other types of tax-favored accounts.”