The IRS recently released Rev. Proc. 2020-32, which outlines the inflation adjusted amounts for 2021 relevant to health saving accounts (HSAs) and high deductible health plans (HDHPs). The new limits are summarized in the table below.
|Annual HSA Contribution Limit|
(employer and employee)
|Self-only: $3,600 |
|HSA Catch-Up Contributions |
(age 55 or older)
|Minimum Annual HDHP Deductible||Self-only: $1,400|
|Maximum Out-of-Pocket for HDHP|
(deductibles, co-pays & other
amounts except premiums)
Next Steps for Employers
As employers prepare for the 2021 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:
- HSA eligible employees can now contribute up to $3,600 (for self-only coverage) and $7,200 (for family coverage).
- The 2021 minimum annual deductible for HDHPs has not changed from 2020. HDHPs cannot have a deductible that is lower than the minimum HDHP deductible of $1,400 (for self-only coverage) and $2,800 (for family coverage).
- The out-of-pocket maximum for HDHPs cannot be higher than $7,000 (for self-only coverage) and $14,000 (for family coverage).
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.