May 20, 2008 issue of Sibson Consulting's Capital Checkup

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May 20, 2008

2009 MINIMUMS AND MAXIMUMS FOR HEALTH SAVINGS ACCOUNTS PLANS AND HIGH-DEDUCTIBLE HEALTH PLANS

On May 13, 2008, the Internal Revenue Service (IRS) released Revenue Procedure 2008-29,¹ which announced various inflation-adjusted amounts for 2009 for Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs). The IRS calculates the annual adjustments using the 12-month period ending March 31.

The new numbers are shown in the chart below.

*2009 Minimums and Maximums for HSAs and HDHPs**
	Individual Coverage	Family Coverage
Maximum Annual HSA Contribution**	$3,000 (up $100 from $2,900 in 2008)	$5,950 (up $150 from $5,800 in 2008)
Minimum HDHP Deductible	$1,150 (up $50 from $1,100 in 2008)	$2,300 (up $100 from $2,200 in 2008)
Maximum HDHP Deductible	None	None
Maximum HDHP Out-of-Pocket Expense***	$5,800 (up $200 from $5,600 in 2008)	$11,600 (up $400 from $11,200 in 2008)


*	HSAs, established by the Medicare Modernization Act (MMA) as of January 1, 2004, allow individuals or employers to contribute to an HSA as long as the individual is covered under an HDHP. (For more information about HSAs, refer to various publications available on Sibson Consulting's Web site.
**	Individuals age 55 or over can contribute an additional $1,000 to their HSAs for 2009. While this amount was indexed in previous years, for 2009 and subsequent years the amount will remain at $1,000 without indexing.
***	The out-of-pocket expense does not include premiums.

Implications for Plan Sponsors

America's Health Insurance Plans' (AHIP) most recent annual study of HSA/HDHP enrollment found that as of January 2008, about 6.1 million Americans were covered by HSAs with HDHPs. This is an increase from 4.5 million one year earlier and 3.2 million in January 2006.²

Before the Tax Relief and Health Care Act of 2006, contributions to an HSA were limited to the lesser of the annual deductible under the companion HDHP or the indexed amount. The Act removed the link to the annual HDHP deductible for tax years beginning after December 31, 2006. This higher permissible contribution was expected to increase interest in HSAs.

Plan sponsors interested in exploring the benefits of an HSA should contact their Sibson consultant to determine what course of action is right for them.

As with all issues involving the interpretation or application of laws, health plan sponsors should rely on their legal counsel for authoritative advice on HSAs. Sibson Consulting can be retained to work with plan sponsors and their attorneys to evaluate the impact of the decision and possible compliance responses.


¹	Revenue Procedure 2008-29, which was published on May 13, 2008, is available on the IRS Web site: http://www.irs.gov/pub/irs-drop/rp-08-29.pdf. (Click on the follow text to return to Capital Checkup.)

²	To see this AHIP research, click here: http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf . (Click on the follow text to return to Capital Checkup.)

Capital Checkup is The Segal Company's periodic electronic newsletter summarizing activity in Washington with respect to health care and related subjects. Capital Checkup is for informational purposes only. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice. A separate Web page lists back issues of Capital Checkup.