Inflation-Adjusted Limits for Health Savings Accounts & High Deductible Health Plans

On May 20, 2020, the IRS released the inflation-adjusted limits for Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) for calendar year 2021 (Rev. Proc. 2020-32). These limits include: (1) the maximum HSA contribution limit, (2) the minimum deductible amount for HDHPs, and (3) the maximum out-of-pocket expense limit for HDHPs. Below are the new limits for 2021, as compared to the limits for 2020.

The minimum annual deductible for an individual HSA-eligible HDHP is $1,400 for 2021, and $2,800 for individuals with covered dependents (no change from 2020).  The 2021 maximum annual out-of-pocket limit is $7,000 for taxpayers with individual HDHP coverage, and $14,000 for taxpayers with family HDHP coverage (as compared with $6,900 and $13,800 for the 2020 calendar year, respectively).  (Note, the 2021 maximum out-of-pocket limit for an individual covered as a member under a non-embedded family HDHP contract can be no more than $8,550 in order to satisfy the ACA maximum out-of-pocket limit.)

The 2021 HSA contribution limits will increase to the following:

If you have any questions, please be sure to reach out to your Hays Companies service team.

This document is provided for general information purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise.

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