You can make a contribution to your HSA each year that you are eligible. For 2019 you can contribute up to $3,500 if you have self-only coverage and $7,000 if you have family coverage.
Individuals older than 55 can also make additional “catch-up” contributions. The maximum annual catch-up contribution for 2019 and after is $1,000.
Using Your HSA
You can use the money in the account to pay for any “qualified medical expense” permitted under federal tax law. This includes most medical care, services, dental and vision care.
You can use the money in the account to pay for medical expenses of yourself, your spouse, or your dependent children. You can pay for expenses of your spouse and your dependent children even if they are not covered by your HDHP.
You can generally not use the money for medical insurance premiums, except under specific circumstances, including:
- Any health plan coverage while receiving federal or state unemployment benefits.
COBRA continuation coverage after leaving employment with a company that offers health insurance coverage.
- Qualified long-term care insurance.
- Medicare premiums and out-of-pocket expenses, including deductibles, co-pays, and co-insurance for:
- Part A (hospital and inpatient services)
- Part B (physician and outpatient services)
- Part C (Medicare HMO and PPO Plans)
- Part D (prescription drugs)
Any amounts used for purposes other than to pay “qualified medical expenses” are taxable as income and subject to an additional 20% tax penalty. Examples include:
- Medical expenses that are not considered “qualified medical expenses” under federal tax law (e.g. cosmetic surgery)
- The purchase of other types of health insurance unless specifically described on the last page.
- Medicare supplement insurance premiums.
- Expenses that are not medical or health related.
Exceptions to the Additional 20% Tax Penalty
The additional 20% tax does not apply to distributions made after the account beneficiary
- Becomes disabled, or
- Turns age 65