2023 2024 2025 HSA Contribution Limits and HDHP Qualification

The contribution limits for numerous tax-advantaged accounts for the next 12 months are often introduced in October, aside from the HSA, which comes out in April or Could. The contribution limits are adjusted for inflation every year, topic to rounding guidelines.

HSA Contribution Limits

Supply: IRS Rev. Proc. 2022-24, Rev. Proc. 2023-23, creator’s calculation.

Employer contributions are included in these limits.

The household protection numbers occurred to be double the person protection numbers in 2024 but it surely isn’t at all times the case yearly. As a result of the person protection restrict and the household protection restrict are each rounded to the closest $50, the household protection restrict will be barely extra or barely lower than double the person protection restrict when one quantity rounds up and the opposite quantity rounds down.

Age 55 Catch-Up Contribution

As in 401k and IRA contributions, you’re allowed to contribute further in case you are above a sure age. In case you are age 55 or older by the top of the 12 months (not age 50 as in 401k and IRA contributions), you may contribute an extra $1,000 to your HSA. In case you are married, and each of you’re age 55, every of you may contribute a further $1,000 to your respective HSA.

Nevertheless, as a result of an HSA is in a single particular person’s title, similar to an IRA — there is no such thing as a joint HSA even when you’ve gotten household protection — solely the particular person age 55 or older can contribute the extra $1,000 in his or her personal title. If solely the husband is 55 or older and the spouse contributes the total household contribution restrict to the HSA in her title, the husband has to open a separate account in his title for the extra $1,000. If each husband and spouse are age 55 or older, they will need to have two HSA accounts in separate names in the event that they need to contribute the utmost. There’s no option to hit the mixed most with just one account.

The $1,000 extra contribution restrict is mounted by legislation. It’s not adjusted for inflation.

Two Plans Or Mid-12 months Adjustments

The boundaries are extra difficult if you’re married and the 2 of you’re on totally different well being plans. It’s additionally extra difficult when your medical insurance adjustments mid-year. The insurance coverage change could possibly be on account of a job change, marriage or divorce, enrolling in Medicare, the start of a kid, and so forth.

For these conditions, please learn HSA Contribution Restrict For Two Plans Or Mid-12 months Adjustments.

HDHP Qualification

You possibly can solely contribute to an HSA if in case you have a Excessive Deductible Well being Plan (HDHP). You should use the cash already within the HSA for certified medical bills no matter what insurance coverage you at the moment have.

The IRS additionally defines what qualifies as an HDHP. For 2023, an HDHP with particular person protection will need to have no less than $1,500 in annual deductible and not more than $7,500 in annual out-of-pocket bills. For household protection, the numbers are a minimal of $3,000 in annual deductible and not more than $15,000 in annual out-of-pocket bills.

For 2024, an HDHP with particular person protection will need to have no less than $1,600 in annual deductible and not more than $8,050 in annual out-of-pocket bills. For household protection, the numbers are a minimal of $3,200 in annual deductible and not more than $16,100 in annual out-of-pocket bills.

For 2025, an HDHP with particular person protection will need to have no less than $1,650 in annual deductible and not more than $8,300 in annual out-of-pocket bills. For household protection, the numbers are a minimal of $3,300 in annual deductible and not more than $16,600 in annual out-of-pocket bills.

Please be aware the deductible quantity is a minimal whereas the out-of-pocket quantity is a most. If the out-of-pocket restrict of your insurance coverage coverage is simply too excessive, it doesn’t qualify as an HSA-eligible coverage.

As well as, simply having the minimal deductible and the utmost out-of-pocket isn’t adequate to make a plan qualify as HSA eligible. The plan should additionally meet different standards. See Not All Excessive Deductible Plans Are HSA Eligible.

Supply: IRS Rev. Proc. 2022-24, Rev. Proc. 2023-23, creator’s calculation.

Contribute Outdoors Payroll

You probably have a Excessive Deductible Well being Plan (HDHP) via your employer, your employer could already arrange a linked HSA for you at a specific supplier. Your employer could also be contributing an quantity in your behalf there. Your payroll contributions additionally go into that account. Your employer could also be paying the charges for you on that HSA. You save Social Safety and Medicare taxes whenever you contribute to the HSA via payroll.

If you contribute to an HSA outdoors an employer, you get the tax deduction in your tax return, just like whenever you contribute to a Conventional IRA. When you use tax software program, you’ll want to reply the questions on HSA contributions. The tax deduction exhibits up on Type 8889 line 13 and Schedule 1 line 13.

In case your HDHP additionally covers your grownup little one who’s not claimed as a dependent in your tax return, they’ll additionally contribute to an HSA in their very own title in the event that they don’t produce other non-HDHP protection. They get a separate household protection restrict. They should open an HSA on their very own with an HSA supplier.

Finest HSA Suppliers

When you get the HSA-eligible excessive deductible plan via an employer, your employer often has a delegated HSA supplier for contributing by way of payroll deduction. It’s greatest to make use of that one as a result of your contributions by way of payroll deduction are often exempt from Social Safety and Medicare taxes. If you’d like higher funding choices, you may switch or roll over the HSA cash out of your employer’s designated supplier to a supplier of your alternative afterward. See How To Rollover an HSA On Your Personal and Keep away from Trustee Switch Charge.

In case you are not going via an employer, or should you’d prefer to contribute by yourself, you may as well open an HSA with a supplier of your alternative. For one of the best HSA suppliers with low charges and good funding choices, see Finest HSA Supplier for Investing HSA Cash.