The IRS has released the 2014 inflation-adjusted amounts for health savings accounts (HSAs) and high-deductible health plans (HDHPs). The changes are not large, but most of the key metrics will see some increase.
HDHP Minimums and Maximums. The minimum annual deductible for an HDHP will remain unchanged at $1,250 for self-only coverage and $2,500 for family coverage. The maximum annual out-of-pocket for an HDHP will increase to $6,350 for self-only coverage and $12,700 for family coverage.
>>Why do we care? Whether health coverage qualifies as HDHP coverage is important because an individual must have HDHP coverage to be eligible to contribute to an HSA.
>>Interaction with health care reform. These amounts relate only to compliance with the HSA requirements. Health care reform will impose further limits on deductibles and out-of-pocket maximums beginning in 2014 (see prior coverage here), and plans will need to satisfy those requirements in addition to the conditions necessary to be an HDHP.
Maximum HSA Contribution. The maximum annual contribution to an HSA for 2014 will be $3,300 for an individual with self-only HDHP coverage and $6,550 for an individual with family HDHP coverage. Catch-up contributions for individuals age 55 and older are not inflation-adjusted and remain at $1,000 per year.
Recall that these annual maximums are prorated on a monthly basis for an individual who is covered under an HDHP for less than the full year. Also, special rules apply when one or both spouses have HDHP coverage, with the general effect of limiting the household to a single family-level HSA contribution for the year.
Consumer-driven health plan models - including the use of HDHPs and HSAs - continue to generate interest among employers looking to curb health care costs by incentivizing employees to think carefully about the cost of health care expenses before incurring them.