On May 28, 2019, The IRS released Revenue Procedure 2019-25 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2020. These limits include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under an HDHP

The IRS limits for HSA contributions will increase for 2020. Eligible individuals with self-only HDHP coverage will be able to contribute up to $3,550 for 2020, while individuals with family HDHP coverage will be able to contribute up to $7,000 for 2020. The HDHP cost-sharing limits also increase for 2020.

 

Action Steps

Because the cost-sharing limits for HDHPs will change for 2020, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2020. Also, employers that allow employees to make pre-tax HSA contributions should confirm that their benefit election forms have been updated for the HSA contribution limits in 2020.

 

HSA/HDHP Limits

The following chart shows the HSA and HDHP limits for 2020 as compared to 2019. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Type of Limit 2019 2020 Change
HSA Contribution Limit Self-only $3,500 $3,550 Up $50
Family $7,000 $7,100 Up $100
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,350 $1,400 Up $50
Family $2,700 $2,800 Up $100
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) Self-only $6,750 $6,900 Up $150
Family $13,500 $13,800 Up $300

 

*HSA/HDHP Limits Increase for 2020

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.

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