IRS Announces 2017 HSA Limits and Maximums

IRS Announces 2017 HSA Limits and Maximums

On April 28, 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-28 that provides the 2017 inflation adjusted amounts for HSAs. The IRS 2017 contribution limits for HSAs, out-of-pocket maximums and minimum deductible levels for HSA-eligible plans are as follows:

2017 Minimum Deductibles

  • Individual — $1,300 (2016 limit is $1,300)
  • Family — $2,600 (2016 limit is $2,600)

2017 Maximum Out-of-Pocket

  • Individual — $6,550 (2016 limit is $6,550)
  • Family — $13,100 (2016 limit is $13,100)

2017 Maximum Annual Contribution Limits

  • Individual — $3,400 (2016 limit is $3,350)
  • Family — $6,750 (2016 limit is $6,750)
  • “Catch-up” amount for 55+ account holders is $1,000 (unchanged)

Guidance for designing an HSA-compliant health plan that has 4th quarter deductible carryover and/or individual “embedded” deductibles:

  • 4th Quarter Carryover — All small group HSA-compliant HDHPs are currently designed to include carryover. If a large group chooses to include the benefit of fourth quarter carryover in their HDHP design, the minimum annual deductible must be increased by 25% to accommodate the extended deductible period. This means that in 2017, plans with fourth quarter carryover must have a deductible of at least $1,625 for individual coverage and $3,250 for family coverage.
  • Embedded Deductible — It is permissible to have an individual member (embedded) deductible on family policies as long as the individual deductible is not less than the minimum family deductible amount established by HSA law ($2,600 in 2017).
  • Fourth Quarter Carryover and Embedded Decutible — If a group wants both an individual “embedded” deductible and fourth quarter deductible carryover, the minimum individual deductible required is $3,250 ($2,600 based on the embedded deductible rule, plus an additional 25% based on the fourth quarter deductible carryover rule).

This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Content provided by SelectAccount.