On May 28, 2019, the Inter­nal Rev­enue Ser­vice (IRS) released Rev­enue Pro­ce­dure 2019–25 announc­ing the annu­al infla­tion-adjust­ed lim­its for health sav­ings accounts (HSAs) for cal­en­dar year 2020. An HSA is a tax-exempt sav­ings account that employ­ees can use to pay for qual­i­fied health expenses.

To be eli­gi­ble for an HSA, an employee:

  • Must be cov­ered by a qual­i­fied high deductible health plan (HDHP);
  • Must not have any dis­qual­i­fy­ing health cov­er­age (called “imper­mis­si­ble non-HDHP coverage”);
  • Must not be enrolled in Medicare; and
  • May not be claimed as a depen­dent on some­one else’s tax return.

The lim­its vary based on whether an indi­vid­ual has self-only or fam­i­ly cov­er­age under an HDHP. The lim­its are as follows:

  • 2020 HSA con­tri­bu­tion limit: 
    • Sin­gle: $3,550 (an increase of $50 from 2019)
    • Fam­i­ly: $7,100 (an increase of $100 from 2019)
    • Catch-up con­tri­bu­tions for those age 55 and old­er remains at $1,000
  • 2020 HDHP min­i­mum deductible (not applic­a­ble to pre­ven­tive services): 
    • Sin­gle: $1,400 (an increase of $50 from 2019)
    • Fam­i­ly: $2,800 (an increase of $100 from 2019)
  • 2020 HDHP max­i­mum out-of-pock­et limit: 
    • Sin­gle: $6,900 (an increase of $150 from 2019)
    • Fam­i­ly: $13,800* (an increase of $300 from 2019)

*If the HDHP is a non­grand­fa­thered plan, a per-per­son lim­it of $8,150 also will apply due to the Afford­able Care Act’s cost-shar­ing pro­vi­sion for essen­tial health benefits.

 

Orig­i­nal­ly post­ed on ThinkHR.com