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June 2020: HSA Limits Increase for 2021

Business Insurance

HSA Limits Increase for 2021

The IRS recently released Revenue Procedure 2020-32 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2021. The IRS is required to publish these limits by June 1 of each year.

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 an individual has self-only or family coverage under an HDHP.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSAs for 2021, up from $3,550 for 2020. Eligible individuals with family HDHP coverage will be able to contribute $7,200 to their HSAs for 2021, up from $7,100 for 2020. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs.

The minimum deductible amount for HDHPs remains the same for 2021 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of-pocket expense limit increases to $7,000 for self-only coverage and $14,000 for family coverage.

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 2021. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.
 
 
 
Additional articles from the June 2020 Employee Benefits Newsletter:
  1. Work-life Balance Considerations Post-coronavirus
  2. Post-coronavirus Business Travel Considerations
  3. Hiring and Managing Seasonal Employees

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Insurance products are offered through Univest Insurance, LLC. and are obligations of the issuing insurance companies, are not obligations or deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the United States. The purchase of insurance products are not a condition to any bank loan, product or service. Univest Insurance, LLC. is a licensed subsidiary of Univest Financial Corporation.

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