IRS Releases Higher HSA Contribution Limits for 2024
The IRS recently announced a significant increase in HSA contribution limits for 2024. Self-only HSAs will rise to a contribution limit of $4,150 (up from $3,850 for 2023) and family HSAs are rising to $8,300 (up from $7,750). According to the U.S. Bureau of Labor Statistics, U.S. consumer prices rose 4.9% for April, down from the most recent peak of 6.6% for September – an indication that the Federal Reserve’s efforts to stem inflation have had some effect. However, notes Bloomberg, rates remain well above those seen prior to the pandemic, and high prices for everything from gas to housing to groceries continue to challenge millions of Americans.
Each year, the IRS updates 1) the minimum annual deductible amount a health plan can have to qualify for a complementary, tax-advantaged health savings account (HSA), 2) the maximum out-of-pocket cost responsibility for the participant, and 3) the HSA contribution limit that an account holder can contribute for the plan year.
The inflation-adjusted increases for 2024 are:
- HSA-Qualified HDHP Self Coverage:Annual deductible must be $1,600 or more in 2024 (up $100 from 2023), and annual out-of-pocket expenses cannot exceed $8,050 (up $550 from 2023)
- HSA Contribution Limit for Self Coverage:Increases to $4,150 in 2024, up $300 from 2023
- HSA-Qualified HDHP Family Coverage:Annual deductible must be $3,200 or more in 2024, up $200 from 2023, and annual out-of-pocket expenses cannot exceed $16,100 (up $1,100 from 2023)
- HSA Contribution Limit for Family Coverage:Increases to $8,300 in 2024, up $550 from 2023