The Internal Revenue Service has announced updated deduction limits for high-deductible health plans.
For calendar year 2020, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high-deductible health plan is $3,550, up $50 from the 2019 limits. Additionally, for calendar year 2020, IRS Revenue Procedure 2019-25 notes that the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high-deductible health plan is $7,100, increased from $7,000 in 2019.
In 2018, the annual limit on deductible contributions was $3,450 for individuals with self-only coverage (a $50 increase from 2017) and $6,900 for family coverage (a $150 increase from 2017).
For calendar year 2020, the Revenue Procedure also explains that a high-deductible health plan is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,900 for self-only coverage or $13,800 for family coverage.
Those limits are up slightly from the 2019 limits of $1,350 for self-only coverage or $2,700 for family coverage, with annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) that don’t exceed $6,750 for self-only coverage or $13,500 for family coverage.
