Health Savings Accounts
Health Savings Account (HSA) Deduction
For 2020, the annual contribution limits on deductions for HSAs for individuals with self-only coverage is $3,550 (increase of $50) and $7,100 for family coverage (increase of $100). There is an additional contribution amount of $1,000 for taxpayers who are age 55 or older.
Health care spending Allows a high-deductible health plan (HDHP) with a health savings account (HSA) to cover telehealth services prior to a patient reaching the deductible, increasing access for patients who may have the COVID-19 virus and protecting other patients from potential exposure.
The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are “qualified medical expenses” that may be reimbursed from those accounts. Specifically, the cost of menstrual care products is now reimbursable. In addition, over-the-counter products and medications are now reimbursable without a prescription. The new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of their purchases for their records.