With inflation running at record levels last year, the IRS provided a sizeable boost to the inflation-adjusted health savings account (HSA) limits for 2024, as determined under Section 223 of the Internal Revenue Code.
The announcement came in Revenue Procedure 2023-23, released May 16.
For calendar year 2024, the annual limitation on deductions under IRC Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan (HDHP) is $4,150, an increase of more than 7% from the 2023 limit of $3,850.
Similarly, the annual limitation on deductions under IRC Section 223(b)(2)(B) for an individual with family coverage under an HDHP is $8,300, which was also a 7% increase from the 2023 limit of $7,750.
The $1,000 catch-up limit for those aged 55 or older remains unchanged, as it is not adjusted for inflation.
For calendar year 2024, a “high deductible health plan” is defined under IRC Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage (up from $1,500 in 2023) or $3,200 for family coverage (up from $3,000 in 2023).
In addition, annual out-of-pocket expenses for 2024 — deductibles, co-payments, and other amounts, but not premiums — may not exceed $8,050 for self-only coverage (up from $7,500) or $16,100 for family coverage (up from $15,000).
The 2024 cost-of-living adjustments mark a continued increase in the annual limitations on deductions, the minimum annual deductible to be a qualified HDHP, and the annual out-of-pocket limits.