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April 20, 2007
Pre-Tax Health Savings Account Contributions
Federal employees enrolled in high-deductible health plans will be able to use pre-tax dollars to schedule automatic contributions to their Health Savings Accounts by the beginning of 2008.
Currently, employees with HSA plans make contributions on their own with after-tax earnings and then declare the contributions on their annual tax returns to get the tax benefit. The new service will allow employees to schedule the payments so they're automatically drafted from their paychecks before taxes are taken out.
Payroll providers will roll out the pre-tax service gradually through Jan. 1.
After their covered payroll provider switches to the new system, employees will be able to make pre-tax contributions using the same method they would use to establish other allotments, such as through the payroll Web sites Employee Express or MyPay. Employees will be able to modify their allotments at any time.
For 2007, employees can set aside $2,850 in a Health Savings Account for single coverage or $5,650 for family coverage, while those who are 55 or older can make an additional catch-up contribution of $800. The maximum contribution includes the premiums contributed to the Health Savings Account by each health plan.
Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at April 20, 2007 11:05 AM