IRS Announces HSA Limits for 2020

posted on

The IRS has released Revenue Procedure 2019-25 that provides the Health Savings Accounts (HSA) limits for 2020.

The 2020 amounts for HSAs and HDHPs as compared to 2019 are as follows:

The annual contribution maximum for 2020 will be increasing by $50 for individuals with self-only HSA qualified HDHP coverage (to $3,550) and increasing by $100 for individuals with family HSA qualified HDHP coverage (to $7,100). The maximum catch-up contribution for eligible account holders over age 55 will remain at $1,000. 

The minimum deductible on an HSA eligible HDHP will increase by $50 for self-only coverage and $100 for family coverage (to $1,400 and $2,800). The maximum out-of-pocket will increase by $150 for self-only coverage and $300 for family coverage (to $6,900 and $13,800).

Please remember, if your plan has an embedded deductible, the single deductible must be at least the same as the minimum family deductible of $2,800 in order to be HSA compliant.

The Department of Health and Human Services (HHS) released the 2020 maximum out-of-pocket limits for non-grandfathered plans mid April 2019. The 2020 maximum for individuals with self-only coverage is $8,150, and the maximum for those enrolled in family coverage is $16,300.  It is important to note that you can have a plan design that is compatible with the Affordable Care Act (ACA), but is not compatible with the HSA rules.  The ACA out of pocket maximums are higher than what is permitted to be considered to be an HSA compatible HDHP.

HSA-compatible HRAs will use the these new minimum deductibles for 2020, which will means plan sponsors with HSA-compatible HRAs (where the up-front participant responsibility is equal to the 2019 minimum deductible amounts) will need to submit HRA amendments at the end of 2019 in order to remain HSA-compatible in 2020.

HSAs continue to grow in popularity. Devenir, an industry leader in HSA investments, reported last week that employer contributions continue to grow. In 2018, employer investments reached over $8 billion, the highest contribution amount to date.

Additional Resource: See our Quick Reference Plan Limits Flyer here:  http://www.ebcflex.com/Portals/8/PDF/quick-forms/PlanLimitsFlyer.pdf

Categories: Benefits in General, Compliance | Tags: HSA , Health Savings Account , 2020 Limits , 2020 HSA Limits , Rev Proc 2019-25 | Return