As you know, with a new year comes new contribution limits for Health Savings Accounts and 401(k) retirement plans. This new year is unique because it also ushers in some new rules due to the Patient Protection and Affordable Care Act that was passed last year.
So let’s look first at the limits for Health Savings Accounts and 401(k) plans:
2011 Health Savings Account Contribution Limits
• The annual HSA contribution limit for employee-only coverage will remain at $3,050. It is $6,150 for family coverage.
• The minimum deductible for employee–only HDHP coverage will remain $1,200 ($2,400 for family coverage)
• The catch-up contribution limit for individuals 55 or older is $1,000.
2011 401(k) Retirement and Related Limits
401k Plan Limits for Plan Year 2011 2010
401k Elective Deferrals $16,500 $16,500
Annual Defined Contribution Limit $49,000 $49,000
Annual Compensation Limit $245,000 $245,000
Catch-Up Contribution Limit $5,500 $5,500
Highly Compensated Employees $110,000 $110,000
Non-401k Related Limits
403(b)/457 Elective Deferrals $16,500 $16,500
SIMPLE Employee Deferrals $11,500 $11,500
SIMPLE Catch-Up Deferral $2,500 $2,500
SEP Minimum Compensation $550 $550
SEP Annual Compensation Limit $245,000 $245,000
Social Security Wage Base $106,800 $106,800
2011 Changes due to Health Care Reform
• Over-the-counter (OTC) medications do not qualify under Health Savings Account or Flexible Spending Accounts unless you have a written prescription for them.
• The penalty for using HSA money on non-qualified expenses is now 20%.