IRS Announces 2020 Health Savings Account Limits

May 31 2019 - Benefits - Erika Pickles

HSAs are pre-tax accounts available to individuals covered under a high-deductible health plan.

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.

Erika Pickles, Employment Law Counsel/HR Adviser

Members can learn more about Health Savings Accounts in the HR Library. Not a member? See how CalChamber can help you.

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