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UPDATEOn May 2, 2013, the IRSannounced higher limits for calendar year 2014 on contributions to health savings accounts (HSAs) and for out-of-pocket spending amounts under the high-deductible health plans (HDHPs) linked to them. Please see the
SHRM Online article "For 2014, Higher Limits for HSA Contributions, Out-of-Pocket Expenses for High-Deductible Plans."
The Internal Revenue Service announced the 2013 limits on contribution and out-of-pocket spending amounts for health savings accounts (HSAs) and for the high-deductible health plans (HDHPs) to which HSAs must be linked.
Revenue Procedure 2012-26, issued on April 27, 2012, the IRS provided the inflation-adjusted HSA contribution and HDHP minimum deductible and out-of-pocket limits for 2013. The higher rates reflect the cost-of-living adjustment and rounding rules of Internal Revenue Code section 223.
A comparison of the 2012 and 2013 limits is shown below:
Contribution and Out-of-Pocket Limits for Health Savings Accounts and for High-Deductible Health Plans
HSA contribution limit (employer + employee)
Individual: $3,100 Family: $6,250
Individual: $3,250 Family: $6,450
Individual: +$150 Family: +200
HSA catch-up contributions (age 55 or older)*
HDHP minimum deductible amounts
Individual: $1,200 Family: $2,400
Individual: $1,250 Family: $2,500
Individual: +$50 Family: +$100
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)
Individual: $6,050 Family: $12,100
Individual: $6,250 Family: $12,500
Individual: +$200 Family: +$400
* Catch-up contributions can be made during the year by HSA participants who will turn 55 by year-end.
** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.
(To learn more about health savings accounts, health reimbursement arrangements and high-deductible health plans, see the
SHRM Online article
Consumer-Driven Decision: Weighing HSAs vs. HRAs.)
HSAs and Health Care Reform
HSA penalties for nonqualified expensesEffective Jan. 1, 2011, the penalty for using HSA funds for nonqualified medical expenses for those under the age of 65 (unless totally and permanently disabled) increased from 10 percent to 20 percent of the funds used for nonqualified expenses. Funds spent for nonqualified purposes also are subject to income tax.
HSAs and coverage of adult children up to age 26While the Patient Protection and Affordable Care Act (PPACA) allows parents to add their adult children (up to age 26) to their health plans, the IRS has not changed its definition of a dependent for health savings accounts. This means that an employee whose 24-year-old child is covered on their HSA-qualified high-deductible health plan is not eligible to use HSA funds to pay for medical bills for that 24-year-old.
If account holders can't claim a child as a dependent on their tax returns, then they can't spend HSA dollars on services provided to that child. According to the IRS definition, a dependent is a qualifying child (daughter, son, stepchild, sibling or stepsibling or any descendant of these) who:
SHRM Online Health Care Reform web page
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