![]() "Employers may make one up-front lump sum contribution, semiannual contributions, quarterly contributions, monthly contributions, per-pay period contributions, or any other regular interval in between," according to ABD Insurance & Financial Services in San Mateo, Calif. "Annual contribution-limit increases allow HSAs to maintain their value and further grow their role as a key retirement-planning building block."Įmployer HSA contributions are not treated as taxable income but do count toward employees' annual contribution limit, Stone noted. "While the increases are modest, they are an additional opportunity for Americans to prepare and pay for their health care needs," noted Stone. "We're seeing growth in HSAs as a vehicle not only for health savings in the near term, but for anticipated health costs in retirement as well." Nevertheless, "these new contribution limits will help increase the value of HSAs to individuals and families," Uralil said. ![]() While increases in HSA contribution limits are tied to inflation rates, "health care costs continue to outpace inflation, which means Americans will spend more out-of-pocket each year," said Shobin Uralil, co-founder and chief operating office of Lively, an HSA services firm. The catch-up contribution amount, however, is fixed by statute. The contribution limits are adjusted for inflation (rounded to the nearest $50) annually, using the Consumer Price Index for All Urban Consumers for the 12-month period ending on March 31. ![]() Adjustments Reflect InflationĬontribution limits for various tax-advantaged accounts for the following year are usually announced in October, "except for HSAs, which come out in the latter part of April or May," explained Harry Sit, CEBS, who writes The Finance Buff blog. In the meantime, those enrolled in an HSA last year can top off contributions for 2019 through the COVID-19-related extended tax day deadline of July 15, 2020. Myers, senior counsel at law firm Proskauer in Washington, D.C. "Employers should consider these limits when planning for the benefit plan year and review plan communications to ensure that the appropriate limits are reflected," advised Damian A. "Plan sponsors should update payroll and plan administration systems for the 2021 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, such as open enrollment and communication materials, plan documents, and summary plan descriptions," advised Jacob Mattinson and Judith Wethall, partners in the Chicago office of law firm McDermott Will & Emery. "While some may view the increases as modest, every dollar matters right now for consumers when it comes to saving," he added. "The IRS contribution-limit increases are in line and similar to prior year increases, despite the COVID-19 environment," said Harrison Stone, general counsel at HSA services firm ConnectYourCare. HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) HSA catch-up contributions (age 55 or older) HSA contribution limit (employer + employee) In Revenue Procedure 2020-32, the IRS confirmed HSA contribution limits effective for calendar year 2021, along with minimum deductible and maximum out-of-pocket expenses for the HDHPs with which HSAs are paired.įor Health Savings Accounts and High-Deductible Health Plans That's about a 1.5 percent increase from this year. ![]() The annual limit on HSA contributions will be $3,600 for self-only and $7,200 for family coverage. Health savings account (HSA) contribution limits for 2021 are going up $50 for self-only coverage and $100 for family coverage, the IRS announced May 21, 2020, giving employers that sponsor high-deductible health plans (HDHPs) plenty of time to prepare for open enrollment season later this year. See the SHRM Online article IRS Announces Spike in 2023 Limits for HSAs and High-Deductible Health Plans. On April 29, 2022, the IRS announced HSA contribution limits for 2023. See the SHRM Online article IRS Announces 2022 Limits for HSAs and High-Deductible Health Plans. ![]() On May 10, 2021, the IRS announced health savings account (HSA) contribution limits for 2022. ![]()
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