Health Insurance

HSA Contribution Limits & Other Requirements

If you are using a Health Savings account to pay for health care costs, annual adjusted contribution limits must be met.

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Many people find that HSAs offer an easy way to pay their medical bills. Contributions to an HSA are exempt from gross income. Earnings and earnings are also exempted from tax. You can use the funds for qualified medical expenses. The account can be kept by your employer even if you are no longer employed. You can use it tax-free to pay qualified medical expenses in a new job or during retirement. HSAs are a great way to cover your healthcare costs.

There are some limitations and requirements you should be aware of. They also adjust for inflation every year. These restrictions apply to your HSA contribution for the year, your minimum deductible for health insurance, and your annual out of pocket expenses. You can cancel your HSA tax savings if you or your plan fail to comply with any restrictions for that particular year.

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HSA Contribution Limits

Each year, your contributions to an HSA will be limited. You can contribute as much as $3,650 to an HSA if you have coverage for yourself only, or $7,300 to family coverage. You can contribute an additional $1,000 in “catch-up” contributions if you are 55 years old or older. Your contribution limit is subject to the employer contributions that are not deductible from your income. This includes amounts contributed through a cafeteria plan to your HSA account. The deadline for submitting your 2022 federal income tax returns is April 18, 2023. You can still contribute to an HSA until then. Below is a table that shows how contribution limits have changed over the years (and 2023 HSAs).

Minimum Deductibles for Health Plans

You must have a high-deductible health plan to be eligible for an HSA. The 2022 health plan must have a minimum $1,400 deductible for self-only coverage and $2,800 family coverage.

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The minimum deductible amounts for 2022 are the same as those for 2021. Below is a table that shows the minimum deductible amounts in the six most recent years, plus 2023.

Limits on Out of Pocket Expenses

Your health plan must have a maximum amount of out-of-pocket medical costs that you are required to pay. Out-of-pocket costs include copayments, deductibles, and other amounts but not premiums. The out-of-pocket limit on self-only coverage in 2022 is $7,050 and $14,100 for family coverage. The IRS states that the limit is only applicable if there are no deductibles or expenses related to services provided by the health plan network.

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The table below shows that the HSA out-of-pocket expenses limits have increased each year to reflect inflation. This includes a $50 increase in self-only coverage, and a $100 increase in family coverage between 2021 and 2022 (and even greater increases for 2023).