On May 16, 2023, the Internal Revenue Service (IRS) announced adjustments to the limits of Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) for the coming year. As stipulated by law, the IRS must release these updated limits before the 1st of June each year.
The adjusted limits encompass:
- The maximum allowable contribution to an HSA;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These parameters fluctuate based on whether an individual is under self-only or family coverage in an HDHP.
In the case of individuals with self-only HDHP coverage, the 2024 contribution limit to their HSAs will see an increase of $300 from the 2023 limit, setting the new limit at $4,150. On the other hand, individuals with family HDHP coverage will experience a $550 increase, pushing their limit to $8,300 for 2024, up from $7,750 in 2023. Moreover, individuals aged 55 or above are allowed to make an additional $1,000 “catch-up” contribution to their HSAs, a figure which remains consistent across years.
The minimum deductible amount for HDHPs is also subject to increase in 2024, with self-only coverage seeing a raise of $100 to $1,600 and family coverage increasing by $200 to a total of $3,200. Out-of-pocket expense limits for HDHPs will also rise in 2024, reaching $8,050 for self-only coverage (up from $7,500 in 2023) and $16,100 for family coverage (up from $15,000 in 2023).
These updates necessitate that employers sponsoring HDHPs reassess their plan’s cost-sharing limits, including minimum deductibles and maximum out-of-pocket expense limits, while preparing for the 2024 plan year. Employers that enable their employees to make pre-tax HSA contributions should also update their plan communications to account for the increased contribution limits.
HSA/HDHP Limits for 2024
The table below illustrates the HSA and HDHP limits for 2024 compared to 2023, including the catch-up contribution limit for HSA-eligible individuals aged 55 or older. This limit remains unchanged year to year as it does not adjust for inflation.
| Type of Limit | 2024 | 2023 | Change |
|---|---|---|---|
| HSA Contribution Limit – Self-only | $4,150 | $3,850 | Up $300 |
| HSA Contribution Limit – Family | $8,300 | $7,750 | Up $550 |
| HSA Catch-up Contributions (not subject to adjustment for inflation) – Age 55 or older | $1,000 | $1,000 | No change |
| HDHP Minimum Deductible – Self-only | $1,600 | $1,500 | Up $100 |
| HDHP Minimum Deductible – Family | $3,200 | $3,000 | Up $200 |
| HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) – Self-only | $8,050 | $7,500 | Up $550 |
| HDHP Maximum Out-of-pocket Expense Limit – Family | $16,100 | $15,000 | Up $1,100 |
