- On August 6, 2024
In Revenue Procedure 2024-25, the IRS announced the inflation-adjusted limits for health savings accounts (HSAs) and qualified high deductible health plans (HDHPs) for 2025. These limits include:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual’s HDHP coverage is self-only or family (one or more dependents).
Effective Dates
The HSA contribution limits for HSAs are effective starting January 1, 2025.
However, the minimum deductibles and maximum out-of-pocket limits for HDHPs only apply to your medical plan when the plan year renews in 2025.
For example, if your plan year renewed on June 1, 2024, your HDHP participants can make HSA contributions up to the new maximum for 2025 starting on January 1, 2025, but the 2025 requirements for the HDHP minimum deductible and maximum out-of-pocket will not apply to your medical plan until your June 1, 2025 renewal.
Upcoming Compliance Deadlines
- Form 5500 for Calendar Year Plans – by July 31, 2024
- PCORI Fee (file Form 720) – by July 31, 2024
- SAR to Participants for Calendar Year Plans – by September 30, 2024
- Distribute Notice of Creditable Rx Coverage – by October 15, 2024
Did You Know? The HSA Contribution Limit is an Annual Limit Based on Monthly Eligibility.
Question: How does the contribution limit for HSAs work? It’s often stated as an annual limit, but isn’t it really monthly?
Answer: The HSA contribution limit is an annual limit that is prorated for the number of months of HSA eligibility in the calendar year. For an individual who is HSA-eligible for all 12 months, their HSA can receive contributions (from any source) up to the full annual limit for their enrollment level. If an individual is HSA-eligible for only a portion of the year, the annual limit is prorated based on the number of months of HSA eligibility. When an individual changes their enrollment level (individual to family or family to individual) midyear, their total annual HSA limit will be the combination of the prorated limits for the number of months of enrollment in each level.
Employers that facilitate or make HSA contributions do not need to limit the amount actually contributed each month but do need to track their employees’ HSA eligibility on a monthly basis to determine any prorated limit that applies. Employers are only responsible for knowing how their own benefit programs affect HSA eligibility and whether an employee is eligible for catch-up contributions. They need not determine whether employees have disqualifying coverage from other sources or how much has been contributed to employees’ HSAs by other means.