HSA Contribution Levels and High Deductible Health Plan Limits Set for 2016

Guidance for health savings account 2016 contributions were recently released by the Internal Revenue Service. The maximum allowable contribution individuals can make to their HSA is increasing by $100 in 2016 to $6,750 for those who have family coverage under a high deductible health plan.  This means that more of an employee’s salary can go untaxed by the government if put toward a high deductible health plan.

Although, the 1.5 percent increase only applies to family coverage. Those with individual coverage remain with a $3,350 contribution limit, same as last year.

HSAs while paired with a HDHP are tax-advantaged accounts to which employees and employers may contribute funds for employees’ health benefit expenses. Individuals can claim tax deductions up to the limits for contributions they make to the accounts when filing their annual income tax returns.

Additionally, the IRS is making some inflation adjustments in 2016 to the dollar amounts it uses to define HDHPs.

Most people are concerned with their deductible. The deductibles are not changing for 2016.  They remain at a minimum of $2,600 for family coverage and $1,300 for individual coverage. The change comes in the form of their out-of-pocket expenses. Those with family coverage will have an out-of-pocket maximum of $13,100 and those with individual coverage will be at $6,550.

A little more than last year’s out-of-pocket limits, which were $12,900 for families and $6,450 for individuals.  These new numbers can be communicated to employees or plan members during open enrollment.

(Source: Healthcare Trends Institue http://www.evolution1.com/healthcare-trends-institute/hsa-contribution-levels-and-high-deductible-health-plan-limits-set-for-2016/)

HSA Limits announced for 2016

On Monday, May 4th the IRS released the 2016 inflation-adjusted amounts for health savings accounts (HSAs). For calendar year 2016, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,350 and for an individual with family coverage it is $6,750. The “high deductible health plan” annual deductible cannot be less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses cannot exceed $6,550 for self-only coverage or $13,100 for family coverage.  You can read the full details in the IRS publication - Rev. Proc. 2015-30.

                                        2015                   2016           CHANGE

Individual Coverage                    $3,350                      $3,350                  none

Family Coverage                         $6,650                       $6,750                  +$100


2014 HSA Limits

The IRS recently issued updated HSA limits for 2014 in Rev. Proc. 2013-25. HR Concepts will be updating all of our materials and notifying participants in our quarterly newsletter in June 2013.

HSA Changes for 2013 Tax Year

IRS 2013 HSA limits

Deductible Requirements Minimums for 2013:
$1,250 for Single (up $50 from 2012)
$2,500 for Family (up $100 from 2012)

Maximum Out-of-Pocket for 2013:
$6,250 for Single (up $100 from 2012)
$12,500 for Family (up $400 from 2012)

Annual Contribution Maximum for 2013:
$3,250 Single (up $150 from 2012)
$6,450 Family (up $200 from 2012)

See the official notice form the IRS here.

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