Inflation Relief: IRS Lets You Put Up to $8,300 Into Your HSA Next Year — Will You Qualify?
Workers with health savings accounts will be able to contribute a lot more beginning in 2024 after the IRS raised contribution amounts for HSAs, as well as deductibles for high-deductible health plans (HDHP).
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For 2024, self-only HSAs will rise to a contribution limit of $4,150 (up from $3,850 in 2023) and family HSAs will rise to $8,300 (up from $7,750), according to the Alegeus website.
Every year the IRS updates the following: the minimum annual deductible amount a health plan can have to qualify for a complementary, tax-advantaged HSA; the maximum out-of-pocket cost responsibility for the participant; and the HSA contribution limit that an account holder can contribute for the plan year.
The inflation-adjusted increases for 2024 are as follows:
HSA-Qualified HDHP Self Coverage: Annual deductible must be $1,600 or more in 2024 (up $100 from 2023) and annual out-of-pocket expenses cannot exceed $8,050 (up $550 from 2023)
HSA Contribution Limit for Self Coverage: Increases to $4,150 in 2024, up $300 from 2023
HSA-Qualified HDHP Family Coverage: Annual deductible must be $3,200 or more in 2024, up $200 from 2023, and annual out-of-pocket expenses cannot exceed $16,100 (up $1,100 from 2023)
HSA Contribution Limit for Family Coverage: Increases to $8,300 in 2024, up $550 from 2023
As the Plan Sponsor website noted, contribution limits are adjusted for inflation every year (rounded to the nearest $50) using the Consumer Price Index for All Urban Consumers for the 12-month period ending on March 21. However, the catch-up contribution amount of $1,000 available to those older than 55 remained the same because it is fixed by statute.
The IRS also announced that the maximum amount that can be made newly available for the plan year for an excepted benefit health reimbursement arrangement is $2,100, according to HR Dive.
The higher HSA contribution limits should help workers navigate the soaring inflation rate that first hit last year, according to Sandy Gleason, vice president of industry consulting for Alegeus, a provider of SaaS-based healthcare payment solutions.
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“For the second year in a row the limits on contributions to an HSA have significantly increased compared to previous years, increasing almost 8% for individuals with self-only coverage and 7.1% for individuals with family coverage,” Gleason told GOBankingRates in an email statement. “Prior to 2023, the contribution limits increased slowly by $50-100 a year when the economic environment was more stable, and inflation was low. The new limits should be welcomed for consumers in or considering joining an HSA plan as they navigate the rising cost of everything from energy to healthcare. “
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This article originally appeared on GOBankingRates.com: Inflation Relief: IRS Lets You Put Up to $8,300 Into Your HSA Next Year — Will You Qualify?
