With inflation running at record levels last year, the Internal Revenue Service provided a sizeable boost to the inflation-adjusted health savings account (HSA) limits for 2024, as determined under Section 223 of the Internal Revenue Code.
The IRS also announced the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under the Pension Excise Tax Regulations.
The announcement came in Revenue Procedure 2023-23, released May 16.
HSA Limits
For calendar year 2024, the annual limitation on deductions under IRC Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan (HDHP) is $4,150, an increase of more than 7% from the 2023 limit of $3,850.
Similarly, the annual limitation on deductions under IRC Section 223(b)(2)(B) for an individual with family coverage under an HDHP is $8,300, which was also a 7% increase from the 2023 limit of $7,750.
The $1,000 catch-up limit for those aged 55 or older remains unchanged, as it is not adjusted for inflation.
HDHP Limits
For calendar year 2024, a “high deductible health plan” is defined under IRC Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage (up from $1,500 in 2023) or $3,200 for family coverage (up from $3,000 in 2023).
In addition, annual out-of-pocket expenses for 2024 — deductibles, co-payments, and other amounts, but not premiums — may not exceed $8,050 for self-only coverage (up from $7,500) or $16,100 for family coverage (up from $15,000).
HRA Adjustments
For plan years beginning in 2024, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA is $2,100, up from $1,950 in 2023.
The revenue procedure is effective for HSAs for calendar year 2024 and for excepted benefit HRAs for plan years beginning in 2024.
Trends
The 2024 cost-of-living adjustments mark a continued increase in the annual limitations on deductions, the minimum annual deductible to be a qualified HDHP, and the annual out-of-pocket limits.
|
Annual Limits |
2022 |
2023 |
2024 |
|
HSA self-only deductible limit |
$3,650 |
$3,850 |
$4,150 |
|
HSA family deductible limit |
$7,300 |
$7,750 |
$8,300 |
|
HDHP self-only minimum limit |
$1,400 |
$1,500 |
$1,600 |
|
HDHP family minimum limit |
$2,800 |
$3,000 |
$3,200 |
|
Out-of-pocket limit - self |
$7,050 |
$7,500 |
$8,050 |
|
Out-of-pocket limit - family |
$14,100 |
$15,000 |
$16,100 |
