NC health insurance HSA contribution information
The Health Savings Account is the new form of NC health insurance designed to allow individuals to have more control over their North Carolina health care expenses. There are many rules for contributions that this article will address.
Anyone can contribute to a North Carolina health insurance HSA on your behalf including your employer, yourself, or your family. Contributions to an HSA can be made at any time during the year in any increment, including: all at once at the beginning of the year, all at once at the end of the year, or in equal amounts during the year.
Tax-free contributions to a NC health insurance HSA through April 15th of the next year just like an IRA account. For example, 2006’s contributions can be made through April 15, 2007.
All contributions to a North Carolina health insurance HSA must be made in cash or via medical savings account or HSA rollover. Unlike regular contributions, rollover contributions need not be in cash and are not subject to the annual contribution limits. Rollovers from an IRA, 401 (k) plan, a health reimbursement arrangement (HRA), or from a health flexible spending arrangement(FSA) are not allowed. HSA funds can be invested throught the HSA administrator in mutual funds, stocks, CD’s, money market accounts, and other options.
If you had a High Deductible Health Plan (HDHP) coverage for the full year, you can make the full catch-up contribution. If you did not have HDHP coverage for the full year, you must pro-rate your “catch-up” contributions for the number of full months you were eligible with HDHP coverage.
An individual can make contributions if he/she is not enrolled in an HDHP for the entire year. However, the maximum amount that the individual can contribute to his/her HSA is prorated based on the number of months that the individual is enrolled in a NC health insurance HDHP. For example, if an individual has HSA coverage under a NC Health plan HDHP that starts on June 1, and continues through December 31, he/she is eligible to make 7/12 of the maximum annual contribution (7 out of 12 months of HDHP coverage). Any HSA contribution that exceeds the contribution limit is not deductible.
These issues may seem complicated, but your local NC health insurance agent should be able to guide you through the process with ease. If you don’t have a local agent, you can get all of your questions answered at websites like this one at http://www.thackeragency.com
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Brian Thacker
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