2022 HSA, Excepted-Benefit HRA Amounts Increase Slightly
As is usual this time of the year the IRS advises the tax practitioner community and taxpayers of the upcoming 2019 H.S.A. Contribution limits for the upcoming 2020 (done in 2021) tax year.
In Rev. Proc. 2021-25, the IRS on Monday provided 2022 inflation-adjusted amounts pertaining to health savings accounts (HSAs) and the maximum amount that may be made newly available for certain health reimbursement arrangements (HRAs).
The annual limitation on deductions under Sec. 223(b)(2)(A) for an HSA with self-only coverage is $3,650, an increase of $50 over 2021; the corresponding amount for family coverage is $7,300, up $100 from 2021. Sec. 223(b)(3) allows an additional $1,000 annual contribution for individuals age 55 or older before the end of the tax year.
The high-deductible health plan (HDHP) that must accompany an HSA also has inflation adjustments, for its minimum plan deductible amount and its maximum annual out-of-pocket limitation. The deductible for 2022 must be at least $1,400 for self-only and $2,800 for family coverage, both the same as for 2021. The out-of-pocket maximums are $7,050 for self-only coverage and $14,100 for family coverage, increases of $50 and $100, respectively, from 2021.
Eligible individuals may make limited annual cash contributions to an HSA to pay the qualified medical expenses of account beneficiaries, up to the annual sum of monthly limitations for months during the tax year in which the individual is eligible. Eligible individuals must have coverage under an HDHP as of the first day of each qualifying month.
An HDHP is a health plan with an annual deductible that is not less than a certain threshold each year and for which annual out-of-pocket expenses, including deductibles, co-payments, and other amounts (but excluding premiums) do not exceed a certain annual limit.
The maximum amount that may be made newly available for plan years beginning in 2022 for an excepted-benefit HRA under Regs. Sec. 54.9831-1(c)(3)(viii) is $1,800, unchanged from 2021.