Health Savings Accounts (HSAs) are pre-tax accounts available to individuals covered under a high-deductible health plan. Eligible individuals can accumulate money, tax-free, in HSAs to pay for qualified medical expenses in the face of rising health insurance costs.
The IRS announced the annual limits for HSA contributions for 2018. These limits are indexed for inflation and released annually by June 1 for the following year. HSA limits were increased for 2018.
The annual maximum HSA contribution for 2018 is:
- $3,450 for individuals with self-only coverage (an increase of $50 from 2017); and
- $6,900 for family coverage (an increase of $150 from 2017).
To participate in an HSA, the policyholder must, among other requirements, be enrolled in an HSA-qualified high-deductible health plan with a minimum annual deductible (not applicable to preventative services).
For calendar year 2018, a high-deductible health plan is defined as a health plan with an annual minimum deductible of:
- $1,350 for self-only coverage (an increase of $50 from 2017); or
- $2,700 for family coverage (an increase of $100 from 2017).
The maximum annual out-of-pocket expenses (deductibles, co-payments and other amounts — but not premiums) have also increased for 2018.
For 2018, the maximum out-of-pocket amounts can’t exceed:
- $6,650 for self-only coverage (an increase of $100 from 2017); or
- $13,300 for family coverage (an increase of $200 from 2017).
For more information on health savings account limits, visit the IRS website.