On Tuesday, May 16th, the IRS released Revenue Procedure 2023-23, providing the inflation-adjusted limits for health savings accounts (HSAs), high deductible health plans (HDHPs), and excepted-benefit health reimbursement arrangements (EBHRA) for 2024. This year’s inflationary adjustment to contribution limits is significant. In fact, the increase is the largest for HSAs since being introduced in 2003 representing an increase of 7.7% for those enrolled in single coverage and 7.1% for individuals enrolled in family coverage.
The changes are reflected in the below table. The increase in HSA contribution limits takes effect on the at the beginning of the 2024 calendar year. The HDHP cost sharing limits and EBHRA contribution limits take effect for the plan year beginning in 2024.
|
Type of Limit |
2023 |
2024 |
Change |
|
|
HSA Contribution Limit |
Self-only |
$3,850 |
$4,150 |
Up $300 |
|
Family |
$7,750 |
$8,300 |
Up $550 |
|
|
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 |
$1,500 |
$1,600 |
Up $100 |
|
Family |
$3,000 |
$3,200 |
Up $200 |
|
|
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) |
Self-only |
$7,500 |
$8,050 |
Up $550 |
|
Family |
$15,000 |
$16,100 |
Up $1,100 |
|
|
Excepted Benefit HRA Contribution Limit |
Per employee |
$1,950 |
$2,100 |
Up $150 |
* Employers offering a plan design with an embedded deductible must make sure the minimum deductible for HDHP self-only plans is at least $3,200.
As a reminder, in order for an individual to be eligible to make HSA contributions, they must be enrolled in qualifying HDHP coverage subject to the minimum deductible and maximum out of pocket limits and; they must not be enrolled in another health plan providing first dollar coverage except what is permitted. Given the increase in minimum deductibles for HDHP plans, employers should pay careful attention to the plan deductible, especially those whose deductibles are embedded. HDHP plans with embedded deductibles, must set the embedded deductible limit to at least the family minimum HDHP deductible limit which is $3,200 for 2024.
In planning for 2024, employers that offer HDHPs with HSAs should review their plan designs to ensure compliance with minimum deductible and maximum out of pocket expense limits. Employers should adjust any employee communication pieces to reflect the increased HSA and/or EBHRA contribution limits as applicable.
If you have additional questions, please contact your HORAN Benefit Consultant at 800.544.8306.
The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation, and their impact on you and your organization.
