On May 16, 2023, the Internal Revenue Service (IRS) provided the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for the 2024 plan year.
The IRS annually adjusts the following amounts and contribution limits to accommodate increases in spending:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
HSA Contribution Limits
- Those with employee-only HDHP coverage will be able to contribute $4,150 to their HSAs, up $300 from 2023.
- Those with family HDHP coverage will be able to contribute up to $8,300 to their HSAs, up $550 from 2023.
- Catch-up contributions for individuals aged 55 or older will remain the same at a max of $1,000.
HDHP Limits
- The minimum deductible amount for those with employee-only coverage will increase to $1,600, up $100 from 2023. For those with family coverage, the limit will increase to $3,200, up $200 from 2023.
- The maximum out-of-pocket expense limit will increase to $8,050 for employee-only coverage (up $550 from 2023) and increase to $16,100 for family coverage (up $1,100 from 2023).
What does this mean for employees and employers?
Annual increases in contribution limits for HSAs and HDHPs can help ensure these benefits remain an attractive perk to an employee’s benefits package. The 2024 limit increases allow employees to set aside more tax-free money to pay for services they need throughout the year, all while reducing their taxable income.
Employers are encouraged to review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) when preparing for the upcoming plan year. If employees are permitted to make pre-tax HSA contributions, then employers must update their plan communications for the increased contribution limits.
If you have any questions regarding your plans or their limits, please contact your dedicated Creative Benefits team member.