The IRS recently released in Revenue Procedure 2021-25 the 2022 annual contribution limits for health savings accounts “HSAs”. These limits are typically adjusted each year for inflation.
The 2022 limits are $3,650 for an individual with self-only coverage and $7,300 for an individual with family coverage. Catch-up contributions for individuals age 55 or older remain $1,000. Such pre-tax contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan.
A high-deductible plan for 2022 is defined as a plan with an annual deductible of $1,400 or more for self-only coverage or $2,800 or more for family coverage. The corresponding maximum out of pocket expenses is $7,050 and $14,100 respectively which is an increase from the 2021 amounts.
Health savings accounts continue to be a powerful tool in combating the rise in health costs. However, they have also seen a rise in utilization as a retirement planning tool given that the accounts grow tax free as opposed to typical retirement accounts that grow tax deferred. Employers should continue to evaluate their effectiveness as part of the overall health benefits strategy.
If you should have any questions, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301.231.6257.