2021 health savings account limits released by IRS

Just halfway through 2020, IRS has already pushed out the limits for high deductible health plans (HDHPs) and health savings accounts (HSAs) for 2021.

And we can tell you that you’ll be able to let employees sock away some extra money next year.

New numbers your team needs

Your 2021 thresholds, according to IRS Revenue Procedure 2020-32:

• The maximum HSA contribution for an individual with self-only HDHP coverage: $3,600 (up $50).
• The maximum HSA contribution for family HDHP coverage: $7,200 ($100 more than in 2020).
• The maximum out-of-pocket amount for an HDHP for self-only coverage: $7,000 (up $100).
• The max out-of-pocket limit for an HDHP participant with a family plan: $14,000 (a $200 increase).
• The minimum deductible HDHP coverage: remains at $1,400 for self-only and $2,800 for family coverage.
• The maximum amount for HSA catch-up contributions for those age 55 or older holds at $1,000.

Will COVID extension continue into 2021?

Remember, for 2020 health plans that otherwise qualify as HDHPs won’t lose that status merely because they cover the cost of COVID-19 testing or treatment before plan deductibles have been met.

You got the green light directly from the Taxman in IRS Notice 2020-15.

And employees in those HDHPs can keep contributing to an HSA.

Seeing as COVID-19 will still be an issue next year, will IRS continue this policy? Stay tuned. We’ll update you.