FSAs, HSAs, HRAs AND MSAs

FSAs, HSAs, HRAs and MSAs

The Affordable Care Act (ACA) introduced provisions affecting flexible spending arrangements (FSAs), health savings accounts (HSAs) and health reimbursement arrangements (HRAs):

  • For taxable years beginning in 2022, the dollar limitation on employee salary reductions for contributions to health FSAs is $2,850.
  • For taxable years beginning in 2021, the dollar limitation on employee salary reductions for contributions to health FSAs is $2,750.
  • For taxable years beginning in 2020, the dollar limitation on employee salary reductions for contributions to health FSAs is $2,750.
  • For taxable years beginning in 2019, the dollar limitation on employee salary reductions for contributions to health FSAs was $2,700.
  • For taxable years beginning in 2018, the dollar limitation on employee salary reductions for contributions to health FSAs was $2,650.
  • Prescriptions for over-the-counter medicine are no longer needed to obtain reimbursement from FSAs, HRAs and HSAs.
  • Feminine hygiene products are now eligible for reimbursement from FSAs, HRAs and HSAs.
  • Tax on non-qualified HSA distributions is 20 percent.

2023 Indexed Amounts for HSAs and HDHPs

The IRS released the 2023 inflation-adjusted contribution limits for health savings accounts (HSAs), as well as the deductible and out-of-pocket spending limits for high-deductible health plans (HDHP).

For self-only coverage:

  • The annual HSA contribution limit is $3850, a $200 increase from $3650 in 2022.
  • The annual catch-up contribution for those 55 years and over is $1000*.
  • The annual deductible for an HDHP must be a least $1500, up $100 from $1400 in 2022.
  • The annual out-of-pocket limit for an HDHP may not exceed $7,500, a $450 increase from $7,050 in 2022.

For family coverage:

  • The annual HSA contribution limit is $7,750, a $450 increase from $7,300 in 2022.
  • The annual catch-up contribution for those 55 years and over is $1000*.
  • The annual deductible for an HDHP must be at least $3,000, a $200 increase from the previous year.
  • The annual out-of-pocket limit for an HDHP may not exceed $15,000, a $900 increase from $14,100 in 2022.

The revised limits, issued in Revenue Procedure 2022-24, become effective for plan years beginning in 2023.

*The catch-up contribution limit (for HSA-eligible individuals aged 55 or older) is set forth in Code § 223(b)(3).

2022 Indexed Amounts for HSAs and HDHPs
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The IRS has released the inflation-adjusted contribution limits for health savings accounts (HSAs), as well as the deductible and out-of-pocket spending limits for high-deductible health plans (HDHPs), for 2022.

For self-only coverage:

  • The annual HSA contribution limit is $3,650, a $50 increase from $3,600 in 2021.
  • The annual catch-up contribution for those 55 years and over is $1,000.
  • The annual deductible for an HDHP must be at least $1,400. (There is no change from the previous year.)
  • The annual out-of-pocket limit for an HDHP may not exceed $7,050, a $50 increase from $7,000 in 2021.

For family coverage:

  • The annual HSA contribution limit is $7,300, a $100 increase from $7,200 in 2021.
  • The annual catch-up contribution for those 55 years and over is $1,000.
  • The annual deductible for an HDHP must be at least $2,800. (There is no change from the previous year.)
  • The annual out-of-pocket limit for an HDHP may not exceed $14,100, a $100 increase from $14,000 in 2021.

The limits, which become effective Jan. 1, 2022, were issued in Revenue Procedure 2021-25.

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2021 Indexed Amounts for HSAs and HDHPs
Read more

The IRS has released the inflation-adjusted contribution limits for health savings accounts (HSAs), as well as the deductible and out-of-pocket spending limits for high-deductible health plans (HDHPs), for 2021.

For self-only coverage:

  • The annual HSA contribution limit is $3,600, a $50 increase from $3,550 in 2020.
  • The annual catch-up contribution for those 55 years and over is $1,000.
  • The annual deductible for an HDHP must be at least $1,400. (There is no change from the previous year.)
  • The annual out-of-pocket limit for an HDHP may not exceed $7,000, a $100 increase from $6,900 in 2020.

For family coverage:

  • The annual HSA contribution limit is $7,200, a $100 increase from $7,100 in 2020.
  • The annual catch-up contribution for those 55 years and over is $1,000.
  • The annual deductible for an HDHP must be at least $2,800. (There is no change from the previous year.)
  • The annual out-of-pocket limit for an HDHP may not exceed $14,000, a $200 increase from $13,800 in 2020.

The limits, which become effective Jan. 1, 2020, were issued in Revenue Procedure 2020-32.

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