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Template: Update Employee HSA Contributions HR Communication

Template: Update Employee HSA Contributions HR Communication

Each year, the IRS announces new maximum contribution limits for health savings accounts (HSA). Use this HR communication template to prepare your employees for the new year by updating their HSA contributions accordingly.

 

What is a Health Savings Account (HSA)?

A health savings account (HSA) is a personal bank account with significant tax advantages that can be used by an individual to pay for qualified medical expenses, typically on high-deductible health insurance plans. 

People with HSAs need to be enrolled in a compatible, high-deductible health plan (HDHP) to properly utilize their benefits. They can then use the money from their HSAs for qualified medical expenses, which can be determined by reviewing the HDHP.

 

2021 HSA Contribution Limits

In June 2020, the IRS released 2021 cost-of-living adjusted limits for HSAs and HDHPs. These new contribution caps include:

  2021 2020

Individual Contribution Limit

$3,600 $3,550
Family Contribution Limit $7,200 $7,100
Catch-up Contribution Limit (for those over age of 55) $1,000 $1,000
Max Individual out-of-pocket $7,000 $6,900
Max Family out-of-pocket $14,000 $13,800


Template: HSA Contributions Update Communication 

Use the following template to remind employees about the updated HSA caps and how they can make adjustments to their contributions: 

Team,

Each year, the IRS announces contribution limits for numerous tax provisions and healthcare savings accounts. Sometimes, the IRS makes adjustments to account for inflation and changes in cost-of-living. 

In 2021, some contribution limits were slightly increased for health savings accounts (HSA). See the chart below for reference:

 

2021

2020

Individual Contribution Limit

$3,600

$3,550

Family Contribution Limit

$7,200

$7,100

Catch-up Contribution Limit (for those over age of 55)

$1,000

$1,000

Max Individual Out-of-Pocket

$7,000

$6,900

Max Family Out-of-Pocket

$14,000

$13,800

Employees who want to update their contribution amount can contact [contact information] or make adjustments to your elections using [name of HRIS].

If you have any questions about HSA contributions or other benefits, please contact [contact information].

Thank you,

[name]

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