Big increase for IRS 2023 HSA, HDHP limits

Surging inflation is impacting the benefits you may offer employees in 2023, including health savings accounts (HSAs).

In Rev. Procedure 2022-24, IRS adjusted next year’s thresholds for HSAs and high-deductible health plans (HDHPs).

And because the updated amounts are so much higher than what they are for this year, you need to let Payroll and other key players at your company know about it. You might also want to give a heads up to your employees.

HSA, HDHP numbers to know

For health plans beginning Jan. 1, 2023, the:

• maximum HSA contribution for individuals with self-only coverage under an HDHP is $3,850 ($200 above 2022’s amount)
• maximum HSA contribution for family HDHP coverage will be $7,750 ($450 higher than the current limit of $7,300)
• minimum deductible HDHP coverage will be $1,500 for self-only participants ($100 higher) and $3,000 for family coverage (a $200 increase)
• max annual out-of-pocket expense threshold for an HDHP – including deductibles, co-pays and any costs other than insurance premiums – is $7,500 (up $450) for self-only coverage
• max out-of-pocket limit for an HDHP participant with a family plan is $15,000 ($900 more), and
• maximum amount that may be made newly available for an excepted-benefit health reimbursement account is $1,950 ($150 above the current amount of $1,800).

What remains the same is the $1,000 maximum HSA catch-up contribution for employees that are 55 or older before the end of the tax year.

These figures are always adjusted for inflation levels. But will they keep pace? According to the Dept. of Labor, the Consumer Price Index rose 8.5% in March over a year ago. It’s the biggest 12-month increase since December 1981.

Also, the U.S. Commerce Department’s Bureau of Economic Analysis reported the personal consumption expenditures price index rose 6.6% over a year ago, reflecting a historic increase in the prices of goods and services.

We’ll keep you posted if IRS announces additional updates.