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IRS Issues 2014 HSA Limits

Monday May 6th 2013

On Thursday, May 2, 2013, the IRS announced the inflation-adjusted increases for thresholds applicable to HSAs and high-deductible health plans (HDHPs) for 2014 in Revenue Procedure 2013-25.HSA

 Here are the 2014 limits:

·      The maximum annual HSA contribution for self-only HDHP coverage will increase from $3,250 to $3,300. The maximum annual HSA contribution for family HDHP coverage will increase from $6,450 to $6,550.

·      Age 55 catch-up contributions will continue to be $1,000 per §223(b)(3) of the Internal Revenue Code.

·      The minimum HDHP deductible limits will remain the same:  self-only coverage is $1,250 and family coverage is $2,500.

·      The annual maximum for HDHP out-of-pocket expenses (deductibles, co-payments and other amounts) will increase from $6,250 to $6,350 for self-only coverage and from $12,500 to $12,700 for family coverage.

These limits are effective for calendar year 2014. For HDHPs with non-calendar plan years, the minimum deductible and out-of-pocket limits are those that are in effect on the first day of the plan year, per Notice 2004-50, Q/A-86.

A recent Fidelity survey showed that HSA participation continued to increase in 2012. With the advent of the Affordable Care Act changes in 2014, a plan design that incorporates an HSA coupled with a high-deductible health plan can be an attractive option. An employer’s HSA contributions can count toward the Minimum Value calculation, as stated in a recent Newsroom article.

Are you considering an HSA-based plan design? If you already have one, what has been your experience?

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