While next year may seem like a ways off, the Internal Revenue Service has just published the 2021 inflation-adjusted amounts for health savings accounts.
In Rev. Proc. 2020-32, the IRS announced that for calendar year 2021, the annual limitation on deductions under Code Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan (HDHP) is $3,600, up $50 from the 2020 limits.
For calendar year 2021, the IRS defines a high deductible health plan under Section 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. These minimum annual deductible levels are unchanged from the 2020 levels.
For calendar year 2021, the annual limitation on deductions under Section 223(b)(2)(B) for an individual with family coverage under an HDHP is $7,200, an increase of $100 from the 2020 limits.
In addition, annual out-of-pocket expenses for calendar year 2021 under an HDHP—generally defined as deductibles, co-payments and other amounts, but not premiums—are limited to $7,000 for self-only coverage and $14,000 for family coverage. These levels are up $100 and $200, respectively, from the 2020 limits.
It appears the HSA catch-up contribution limit for individuals 55 and older will remain at $1,000, as there was no mention of it in the revenue procedure.
The cost-of-living adjustments for various retirement plan contribution and benefit limitations that will take effect for the coming year generally are not released until late October or early November.
