HSA Maximum Contributions Increase Again in 2024

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The IRS recently announced an inflation adjustment increase in the maximum contribution limits for Health Savings Accounts (HSAs) for 2024, detailed in Revenue Procedure 2023-23 (RP-23-23).

What are the inflation adjustments for 2024?

  • For individuals with self-only coverage under a high deductible health plan – the limitation is $4,150 (up from $3,850 in 2023)
  • For individuals with family coverage under a high deductible health plan – the limitation is $8,300 (up from $7750 in 2023)

How is a High Deductible Health Plan defined for 2024?

RP 23-23 defines a high deductible health plan as a health plan requiring an annual deductible of at least $1,600 for individuals or $3,200 for families (up from $1,500 to $3,000 for 2023). The total out-of-pocket expenses, including deductibles, co-payments, and other amounts (excluding premiums), cannot exceed $8,050 for individuals or $16,100 for families (up from $7,500 and $15,000 for 2023).

How does the IRS calculate HSA inflation increases?

The announced increases for 2024 accurately reflect the rising consumer costs, which are higher than seen in nearly four decades. The IRS utilizes the chained CPI, an index that measures the “average change over time in the prices paid by urban consumers for a market basket of consumer goods and services,” to calculate inflation. This percentage is applied to various HSA amounts and rounded to the nearest $50.

Benefits of using an HSA

A white ceramic piggy bank on a wooden table, with coins piled to the side and a $100 bill being placed in the bank slot. This image represents the concept of increasing Health Savings Account (HSA) contributions. The piggy bank symbolizes savings, and the $100 bill suggests an increase in funds allocated to an HSA.HSA accounts offer several benefits to account holders. The fund can accumulate over time, grow tax-free, and be utilized for various medical expenses. Contributions are typically made pre-tax and considered “portable,” meaning that if an employee changes employers or leaves the workforce, the HSA account remains with the account holder.

We’re Here to Help

If you have questions about your HSA and how the increases for 2024 may affect your tax liability, JLK Rosenberger can help. Please call us at 949-860-9902 or click here to contact us.