IRS Announces HSA Limits for 2020

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On May 28, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-25 announcing the annual inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2020. An HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses.

To be eligible for an HSA, an employee:

  • Must be covered by a qualified high deductible health plan (HDHP);
  • Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
  • Must not be enrolled in Medicare; and
  • May not be claimed as a dependent on someone else’s tax return.

The limits vary based on whether an individual has self-only or family coverage under an HDHP. The limits are as follows:

  • 2020 HSA contribution limit:
    • Single: $3,550 (an increase of $50 from 2019)
    • Family: $7,100 (an increase of $100 from 2019)
    • Catch-up contributions for those age 55 and older remains at $1,000
  • 2020 HDHP minimum deductible (not applicable to preventive services):
    • Single: $1,400 (an increase of $50 from 2019)
    • Family: $2,800 (an increase of $100 from 2019)
  • 2020 HDHP maximum out-of-pocket limit:
    • Single: $6,900 (an increase of $150 from 2019)
    • Family: $13,800* (an increase of $300 from 2019)

*If the HDHP is a nongrandfathered plan, a per-person limit of $8,150 also will apply due to the Affordable Care Act’s cost-sharing provision for essential health benefits.

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About Kathleen A. Berger, CEBS

Kathy Berger is ThinkHR’s principal benefits consultant. She is a Certified Employee Benefits Specialist (CEBS) with over 25 years of experience working with brokers and employers. Kathy uses her extensive knowledge of ERISA, HIPAA, the ACA, and other benefits laws and regulations to assist our clients with practical information in clear language.

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