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e-Alert: HSA/HDHP Limits Increase for 2023

By May 6, 2022 May 9th, 2022 No Comments

Background

Each year the IRS announces inflation-adjusted limits for HSAs and HDHPs. By law, the IRS is required to announce these limits by June 1 of each year. On April 29, 2022, the IRS released Revenue Procedure 2022-24 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2023. The IRS is required to publish these limits by June 1 of each year.

Summary

These limits include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs

These limits vary based on whether the individual has self-only or family coverage under an HDHP.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,850 to their HSAs for 2023, up from $3,650 for 2022. Eligible individuals with family HDHP coverage will be able to contribute $7,750 to their HSAs for 2023, up from $7,300 for 2022. Individuals aged 55 or older may make an additional $1,000 “catch-up” contribution to their HSAs.

The minimum deductible amount for HDHPs increases to $1,500 for self-only coverage and $3,000 for family coverage for 2023 (up from $1,400 for self-only coverage and $2,800 for family coverage for 2022). The HDHP maximum out-of-pocket expense limit increases to $7,500 for self-only coverage and $15,000 for family coverage for 2023 (up from $7,050 for self-only coverage and $14,000 for family coverage for 2022).

HSA/HDHP Limits

The following chart shows the HSA and HDHP limits for 2023 as compared to 2022. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

 

Type of Limit 2022 2023 Change
HSA Contribution Limit Self-Only $3,650 $3,850 Up $200
Family $7,300 $7,750 Up $450
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,400 $1,500 Up $100
Family $2,800 $3,000 Up $200
HDHP Maximum Out-of-Pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) Self-only $7,050 $7,500 Up $450
Family $14,100 $15,000 Up $900

 

Employer Next Steps

  • Employers that sponsor HDHPs should review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) when preparing for the plan year beginning in 2023. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.

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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.

 

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