Employee Benefits Compliance, HRAs & HSAs

IRS Releases HSA Limits for 2016

On May 4, 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-30 to announce the inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2016. The IRS announced the following limits for 2016:

  • The maximum HSA contribution limit;
  • The maximum deductible amount for high deductible health plans (HDHPs); and
  • The maximum out-of-pocket expense limit for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under an HDHP.
Only some of the HSA limits will increase for 2016. The limits that will increase are the HSA contribution limit for individuals with family HDHP coverage and the maximum out-of-pocket expense limit for self-only and family HDHP coverage.

For a subsequent article (June 29, 2015) that affects HDHP deductibles and OOP maximums,  click here  (“Individual Out-of-Pocket Maximums must Apply for Family Coverage in 2016”).

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HSAs are special medical reimbursement accounts (under IRC § 223) that generally can be funded only for individuals who are enrolled in “high deductible health plans” (HDHPs) as defined under IRC § 223(c)(2)(A), and who are not enrolled in non-HDHP health plans.  (There are limited exceptions;  H.S.A. contributions can be made by or on behalf of individuals who are also enrolled in “limited purpose” health flexible spending accounts, in “permitted insurance” under IRC § 223(c)(3), in “disregarded coverage” under IRC § 223(c)(1)(B)(ii) or in “preventive care” under § 223(c)(2)(C).)

The annual limit on H.S.A. deductions is at Code § 223(b)(2)(A)

High deductible health plan definition, annual deductible minimum and out-of-pocket maximum are in Code § 223(c)(2)(A).  The out-of-pocket maximum includes in-network deductibles, copayments and coinsurance, but does not include premiums or balance-billing for out-of-network services.

Rev. Proc. 2015-30