The Internal Revenue Service (IRS) announced the annual limits for Health Savings Accounts (HSAs) for 2020.
HSAs are pre-tax accounts available to individuals covered under a high-deductible health plan. Eligible individuals can accumulate money, tax-free, in HSAs to pay for qualified medical expenses. The HSA limits, which are indexed for inflation every year, will increase in 2020.
The annual maximum HSA contribution for 2020 is:
- $3,550 for individuals with self-only coverage (an increase of $50 from 2019); and
- $7,100 for family coverage (an increase of $100 from 2019).
To participate in an HSA, the policyholder must, among other requirements, be enrolled in an HSA-qualified high-deductible health plan with a minimum annual deductible (not applicable to preventative services).
For calendar year 2020, a high-deductible health plan is defined as a health plan with an annual minimum deductible of:
- $1,400 for self-only coverage (an increase of $50 from 2019); or
- $2,800 for family coverage (an increase of $100 from 2019).
The maximum annual out-of-pocket expenses (deductibles, co-payments and other amounts — but not premiums) have also increased for 2020.
For 2020, the maximum out-of-pocket amounts can’t exceed:
- $6,900 for self-only coverage (an increase of $150 from 2019); or
- $13,800 for family coverage (an increase of $300 from 2019).
For more information on health savings account limits, visit the IRS website.