HSA amounts continue trend, increase again in 2024

As is usual this time of the year the IRS advises the tax practitioner community and taxpayers of the upcoming 2024 H.S.A. Contribution limits for the upcoming 2024 (done in 2023) tax year for an individual with self-only coverage will be $4,150, and for an individual with family coverage, the maximum contribution will be $8,300.

The maximum contribution to a health savings account (HSA) and certain related benchmarks will again be sharply higher next year. The IRS announced the updated amounts Tuesday in Rev. Proc. 2023-23, issued pursuant to Sec. 223(g). The revenue procedure also includes the revised maximum amount that may be made newly available for excepted-benefit health reimbursement arrangements (HRAs) under Regs. Sec. 54.9831-1(c)(3)(viii).

HSA contributions

The 2024 maximum contribution to an HSA that may be made for calendar 2024 by an individual with self-only coverage will be $4,150, a $300 increase from 2023. For an individual with family coverage, the maximum contribution will be $8,300, which is $550 higher than the current limit of $7,750.

The $1,000 “catch-up” additional contribution that may be made by individuals who are age 55 or older before the end of the tax year is unchanged because it is set by statute (Sec. 223(b)(3)).

An eligible individual 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.

HDHP amounts

With either type of coverage, an eligible individual must be covered under a high-deductible health plan (HDHP) (and may not be covered under any other health plan that provides coverage for any benefit that is covered under the HDHP). The minimum annual deductible amount and maximum out-of-pocket amounts of HDHPs are also adjusted for inflation.

For 2024, a qualifying HDHP must have an annual deductible of at least $1,600 for self-only coverage ($100 higher than for 2023) or $3,200 for family coverage (a $200 increase). In addition, annual out-of-pocket expenses, including deductibles, co-payments, and other amounts exclusive of premiums may not be more than $8,050 for self-only coverage or $16,100 for family coverage — increases, respectively, of $550 and $1,100.

Excepted-benefit HRA maximum

For plan years beginning in 2024, the maximum amount that may be made newly available for an excepted-benefit HRA under Regs. Sec. 54.9831-1(c)(3)(viii) is $2,100, which is $150 higher than the 2023 amount of $1,950.

Categories

Member and Featured Faculty of

Member and Featured Faculty of