Under the employer mandate of the Affordable Care Act, large employers with more than 50 employees must offer affordable health coverage. The IRS uses a formula to help determine what […]
Serving Colorado's Counties
The IRS has announced increases to the 2023 Health Savings Account (HSA) contribution limits. The rates take into account inflation and cost-of-living adjustments, as well as rounding rules under Internal Revenue Code Section 223. The 2023 increases are higher than those seen in previous years because of the recent jump in inflation. The self-only limit increased by $200 from 2022, while the family limit increased by $450. Minimum deductible and maximum out-of-pocket expenses for the high deductible health plans (HDHPs) that function with HSAs will also see significant increases as shown in the table below.
| For 2022 | For 2023 | Change | |
|---|---|---|---|
| HSA contribution limit (employer + employee) | Self-only: $3,650 Family: $7,300 | Self-only: $3,850 Family: $7,750 | Self-only: +$200 Family: +$450 |
| HSA catch-up contributions (age 55 or older)* | $1,000 | $1,000 | No change** |
| HDHP minimum deductibles | Self-only: $1,400 Family: $2,800 | Self-only: $1,500 Family: $3,000 | Self-only: +$100 Family: +$200 |
| HDHP maximum out-of-pocket amounts (deductibles, copays and other amounts, but not premiums) | Self-only: $7,050 Family: $14,100 | Self-only: $7,500 Family: $15,000 | Self-only: +$450 Family: +$900 |
HSAs are always set up under an individual’s name and are never held jointly. When the HSA is linked to a family or an employee plus one HDHP, the HSA is subject to the higher family coverage contribution limit. The IRS has not established an “employee plus one” category for contribution limits. Employees who exceed the contribution limit face an annual 6 percent excise penalty tax on the excess amount unless it is withdrawn from the HSA before the tax deadline for that year.
For 2023, the individual IRS contribution limit for HSAs increased by $200 while the family limit increased by $450. An individual enrolled in “employee plus one” coverage will be subject to the family contribution limit. The County Health Pool will provide updates regarding IRS contribution limits for upcoming years. For more information, contact CTSI at 303-861-0507.
A PDF of this Technical Update is available here.
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