The IRS recently released the Revenue Procedure 2010-22, which provides the inflation adjusted amounts for the Health Savings Accounts effective for calendar year 2011. Health Savings Accounts (HSA) are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. A high deductible health plan (HDHP) is a consumer-driven health plan that typically offers lower premiums in exchange for higher annual deductibles compared to traditional health plans. Annual contribution limits for calendar year 2011 are unchanged from 2010 amounts.

2011 HSA Annual Contribution Limits:

• Employee Only HDHP coverage remains $3,050

• Family HDHP coverage remains $6,150

2011 HDHP Minimum Required Deductibles:

• Employee Only HDHP coverage remains $1,200

• Family HDHP coverage remains $2,400

2011 HDHP Out-of-Pocket Expenses Maximum (including items such as deductibles, co-payments and co-insurance, but not premiums):

• Employee Only HDHP coverage remains $5,950

• Family HDHP coverage remains $11,900

Other 2011 HSA related information includes:

• Catch-up contribution limit which is set by statute (for HSA eligibles age 55 or older), remains at $1,000 for 2011.• Health care reform provisions include an increase on the taxable, nonmedical distributions from 10% to 20% of the distribution

• Over-the-counter drugs and medicines (other than insulin) may only be reimbursed tax-free with a prescription from a physician.

For more information on these updated contribution limits, please contact the Emplicity Benefits Department at 877.HR.MADEZ (476.2339) ext. 5.