We now have the inflation adjustment limits for 2024 for HSAs.
Each year, the IRS announces inflation-adjusted limits for HSAs and HDHPs. The IRS released Revenue Procedure 2023-23 on May 16, 2023, to provide the inflation-adjusted limits for health savings accounts (HSAs). It also provides inflation-adjusted limits for high-deductible health plans (HDHPs). The IRS is required to publish these limits by June 1 every year.
The limits for health savings accounts and high deductible health plans include:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
Depending on whether a person is covered by an HDHP as a family or as an individual, these limits change.
For qualified people with self-only HDHP coverage, the maximum HSA contribution will rise from $3,850 in 2023 to $4,150 in 2024. For those who qualify and have family HDHP coverage, the maximum HSA contribution is going to rise from $7,750 in 2023 to $8,300 in 2024. Fifty-five years of age or older are eligible to contribute an additional $1,000 to their HSA as a “catch-up” payment.
For HDHPs, the minimum deductible amount rises to $1,600 for self-only coverage in 2023 from $1,500, and to $3,200 for family coverage in 2024 from $3,000 in 2023. The maximum amount of money that can be spent out of pocket for HDHP coverage rises from $7,500 for self-only coverage in 2023 to $8,050 and from $15,000 for family coverage in 2023 to $16,100 for 2024.
HSA/HDHP Cap Increase Procedures
The new payment limits for HSAs will start on January 1, 2024. The new cost-sharing limits for HDHPs will start with the plan year that starts on or after January 1, 2024. Employers offering HDHPs should look at their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket spending limits) as they get ready for the 2024 plan year. Also, companies that let their workers put money into an HSA before taxes should change the way they talk about the plan to reflect the higher contribution limits.