Employee Benefits Compliance, HRAs & HSAs

IRS Publishes HSA Limits for 2017

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On April 29, 2016, the Internal Revenue Service (IRS) released Revenue Procedure 2016-28 to announce the inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2017. The IRS announced the following limits for 2017:

  • 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 and HDHP. Only one of the HSA limits will increase for 2017: the HSA contribution limit for individuals with self-only HDHP coverage will increase by $50 for 2017.

Type of Limit 2017 2016 Change
HSA Contribution Limit Self-only $3,400 $3,350 $50 increase
Family $6,750 $6,750 No change
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,300 $1,300 No change
Family $2,600 $2,600
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) Self-only $6,550 $6,550 No change
Family $13,100 $13,100 No charge

H.S.A.s are special medical reimbursement accounts (under § 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 section 223(b)(2)(A)

High deductible health plan definition, annual deductible minimum and out-of-pocket maximum are in Code section 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.