The IRS has released Revenue Procedure 2020-32 announcing the HSA contribution limit increases for 2021.
- The 2021 HSA contribution limit for individual coverage will increase by $50 to$3,600.
- The 2021 HSA contribution limit for family coverage (employee plus at least one other covered) will increase by $100 to$7,200.
The catch-up contribution limit of $1,000 is fixed by law and does not adjust for inflation.
The Revenue Procedure also includes the 2021 calendar year minimum deductible and out-of-pocket maximums allowed for a plan to qualify as a high deductible health plan (HDHP)the required coverage for an individual to be eligible to make or receive HSA contributions.
- The 2021 minimum deductible for individual coverage will remain the same at $1,400.
- The 2021 minimum deductible for family coverage will remain the same at $2,800.
- The 2021 maximum out-of-pocket limit for individual coverage will increase by $100 to $7,000.
- The 2021 maximum out-of-pocket limit for family coverage will increase by $200 to $14,000.
| 2020 | 2021 | |
| HDHP Minimum Deductible | ||
| Single | $1,400 | $1,400 |
| Family | $2,800 | $2,800 |
| HDHP Maximum Out-of-Pocket | ||
| Single | $6,900 | $7,000 |
| Family | $13,800 | $14,000 |
| HSA | ||
| Contribution Limit | ||
| Single | $3,550 | $3,600 |
| Family | $7,100 | $7,200 |
| HSA | ||
| 55 + Contribution | ||
| Single | $1,000 | $1,000 |
| Family | $1,000 | $1,000 |
Other Recent HDHP/HSA-Related Changes
IRS Permits HDHPs to Provide First-Dollar Coverage for COVID-19:
- https://theabdteam.com/blog/irs-and-dol-issue-new-covid-19-guidance-regarding-hdhp-and-hsa-eligibility
CARES Act Makes Multiple HDHP/HSA Changes:
- https://theabdteam.com/blog/how-the-cares-act-affects-employee-benefits
- HDHPs Can Provide First-Dollar Telehealth Services
- Tax-Free HSA Distributions for OTC Medicines and Drugs Without a Prescription
- Tax-Free HSA Distributions for Menstrual Care Products
IRS Expands Definition of Preventive Care for HDHPs:
- https://theabdteam.com/blog/irs-expands-definition-of-preventive-care-for-hdhps
Recent COVID-19 Alerts
IRS Relaxes Cafeteria Plan Rules for COVID-19 and Increases Health FSA Carryover to $550:
Major Employee Benefits Timeframe Extensions Announced for COVID-19 National Emergency:
- https://theabdteam.com/blog/major-employee-benefits-timeframe-extensions-announced-for-covid-19-national-emergency
Full HDHP/HSA and COVID-19 Guides
Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipients current employee benefits issues.This analysis does not necessarily fully address the recipients specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipients general counsel or an attorney hired by the recipient who specializes in employee benefits law).
