2021 Limits For Health Savings Accounts (HSA) And High Deductible Health Plans (HDHP)

The IRS released the 2021 Health Savings Account (HSA) contribution limits, the minimum required HDHP deductibles, and the HDHP out-of-pocket maximums.  Each year, the IRS reviews these figures based on a cost-of-living adjustment.  The figures below pertain to HSAs and HSA-qualified High Deductible Health Plans.

2021 Annual HSA Contribution Limits

Single:  $3,600 ($50 increase from 2020)

Family:  $7,200 ($100 increase from 2020)

2021 Annual Minimum HDHP Required Deductibles

Single:  $1,400 (No change from 2020)

Family:  $2,800 (No change from 2020)

2021 HDHP Out-of-Pocket Maximums

Single:  $7,000 ($100 increase from 2020)

Family:  $14,000 ($200 increase from 2020)

Federal rules permit catch-up contributions to HSAs if the accountholder is 55 or older, allowing an increase in annual contributions up to an additional $1,000 per year.  Accountholders are eligible for this extra contribution if they are 55 years or older, or turning 55 anytime during that year.  If the accountholder’s spouse is also turning 55, the spouse cannot contribute their catch-up contribution to the accountholder’s HSA.  However, if the spouse meets the eligibility requirements, they can open their own HSA and contribute catch-up contributions to that account.

As a reminder, as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was signed into law on March 27, 2020, Congress is now allowing consumers to use a Health Savings Account (HSA), a Flexible Spending Account (FSA), or a Health Reimbursement Account (HRA), to pay for non-prescription over-the-counter medications, such as for pain and allergies.  In addition, menstrual care products are now considered qualified medical expenses.  The CARES Act also allows the use of HSAs for telehealth and other remote care services, pre-deductible without impacting HSA eligibility, until December 31, 2021.  The changes to eligible expenses are retroactively effective January 1, 2020.

More information can be found at:

https://www.irs.gov/pub/irs-drop/rp-20-32.pdf

https://www.congress.gov/bill/116th-congress/senate-bill/3548/text