New HSA Limits For 2024
In the recently released Rev. Proc. 2023-23, the IRS has made annual inflation adjustments to health savings accounts:
- For the calendar year 2024, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) do not exceed
- $8,050 for self-only coverage or $16,100 for family coverage.
- For calendar year 2024, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $4,150.
- For calendar year 2024, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $8,300.
The HSA catch-up contribution limit for those age 55 and older is set by statute at $1,000 and remains unchanged.
What’s behind the changes
The Society for Human Resource Management noted that the annual contribution limits are rising by more than 7%, “in one of the biggest jumps in recent years.” These changes are due to the high inflation rates. The increased limits should bring additional attention to HSAs: “Many industry experts tout health savings accounts as a smart way for employees to save for medical expenses, even in retirement, citing their triple tax benefits: Contributions are made pre-tax, the money in the accounts grows tax-free and withdrawals for qualified medical expenses are tax-free.”
The SHRM said that at the end of 2022, Americans held $104 billion in 35.5 million HSAs.
This is just a summary of complex provisions. To see whether an HSA is right for you, speak with a financial professional.
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