2023 Limits for HSAs, HDHPs and HRAs Announced
The IRS has released important 2023 inflation-adjusted amounts for health savings accounts (HSAs), high-deductible health plans (HDHPs) and health reimbursement arrangements (HRAs). Contribution limits are rising more than usual due to the high rate of inflation.
Health savings accounts
The Internal Revenue Code (IRC) allows employers, employees or both to contribute pretax dollars to HSAs that are paired with qualified HDHPs. HDHPs must adhere to minimum deductible amounts and maximum out-of-pocket costs.
As noted, the maximum contribution level for HSAs for individuals and families is increasing for 2023. The additional catch-up contribution level for individuals age 55 and older remains the same.
| HSA maximum contribution level | 2022 | 2023 |
|---|---|---|
| Individual coverage | $3,650 | $3,850 |
| Family coverage | $7,300 | $7,750 |
| Catch-up contributions for age 55 and older | $1,000 | $1,000 |
High-deductible health plans
For 2023, the minimum deductible amount and maximum out-of-pocket amount for individuals and families in qualifying HDHPs are also increasing. The maximum out-of-pocket amount will be significantly higher.
| HDHP minimum deductible amount | 2022 | 2023 |
|---|---|---|
| Individual coverage | $1,400 | $1,500 |
| Family coverage | $2,800 | $3,000 |
| HDHP maximum out-of-pocket amount | 2022 | 2023 |
|---|---|---|
| Individual coverage | $7,050 | $7,500 |
| Family coverage | $14,100 | $15,000 |
Excepted benefit health reimbursement arrangements
Excepted benefit HRAs are another way to provide certain tax-advantaged benefits. For example, you can offer an excepted benefit HRA to help employees pay for vision and dental coverage that is not provided under your primary group health plan.
HRA contributions can be made only by employers. If you offer an excepted benefit HRA, your maximum contribution amount is increasing by $150 in 2023.
| Excepted benefit HRA | 2022 | 2023 |
|---|---|---|
| Maximum employer contribution | $1,800 | $1,950 |