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IRS releases HSA limits for 2021

IRS releases HSA limits for 2021

The IRS has released the 2021 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). 

 

What is an HSA and who is eligible?

An HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses. To be eligible for an HSA, one must: 

  • Be covered by a qualified high deductible health plan (HDHP)
  • Not have any disqualifying health coverage (non-HDHP)
  • Not be enrolled in Medicare
  • Not be claimed as a dependent on someone else's tax return



2021 HSA Contribution Limits:

The new contribution limits are dependent upon whether an individual is enrolled in self-only or family coverage under an HDHP.


The 2021 HSA contributions have increased to: 

  • Single Coverage: $3,600 ($50 increase from 2020)
  • Family Coverage: $7,200 ($100 increase from 2020) 


The 2021 HDHP Minimum Deductible*: 

  • Single Coverage: $1,400 ($0 change from 2020)
  • Family Coverage: $2,800 ($0 change from 2020) 

2021 HDHP Maximum Out-of-Pocket Limit**: 

  • Single Coverage: $7,000 ($100 increase from 2020)
  • Family Coverage: $14,000 ($200 increase from 2020)

 

For those 55 and older, catch-up contributions remain at $1,000. 

 

 


* The deductible does not apply to preventative care services, nor to services related to COVID-19 testing. 

** If the HDHP is a non-grandfathered plan, a per-person limit of $8,550 also will apply due to ACA's cost-sharing provision for essential health benefits. 

 

 

HR Audit Guide

 

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