On May 28, 2019, the Internal Revenue Service (IRS) announced in Revenue Procedure 2019-25 the 2020 health savings account (HSA) annual contribution limit and the 2020 high deductible health plan (HDHP) definitional limit per Internal Revenue Code Section 223. Limits have been increased for 2020 as follows:
- For 2020, a HDHP is defined as “a health plan with an annual deductible that is not less than $1,400 for self-only coverage and $2,800 for family coverage.”
- For 2020, HDHP annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) cannot exceed $6,900 for self-only coverage and $13,800 for family coverage.
- The 2020 annual contribution limit to an HSA for individuals with self-only coverage under a HDHP is $3,550, and for an individual with family coverage under a HDHP, the HSA contribution limit is $7,100.
The following table is a comparison of the 2019 and 2020 limits:
|2020 Individual||2020 Family||2019 Individual||2019 Family|
|HSA Contribution Adjusted Limit||$3,550||$7,100||$3,500||$7,000|
|HDHP Deductible Adjusted Limit||$1,400||$2,800||$1,350||$2,700|
|HDHP Out-of-Pocket Adjusted Limit||$6,900||$13,800||$6,750||$13,500|
Employers that sponsor a health plan that includes an HDHP/HSA option may want to revise their plan participant communications to make sure they are updated accordingly, as well as ensure that 2020 open enrollment materials properly reflect these limits.