A Health Savings Account (HSA) lets an individual set aside money on a pre-tax basis to pay for qualified medical expenses.
While the funds in an HSA can be used to pay for qualified medical expenses at any time, an individual may only contribute to an HSA if they are enrolled in a high deductible health plan (HDHP).
Each year, the Internal Revenue Services (IRS) releases updated HSA contribution limits as well as HDHP requirements.
Last week, The IRS released the 2021 health savings account (HSA) annual contribution limits and high deductible health plan (HDHP) requirements in IRS Rev. Proc. 2020-32.
The updated annual dollar amounts are set forth below.
2021 HSA Annual HSA Contribution Limits*
- Self-only (single) HDHP coverage = $3,600
- Other than self-only (family) HDHP coverage = $7,200
*Catch-up contributions — HSA-eligible individuals who have reached age 55 by the end of the taxable year can make an extra annual $1,000 catch-up contribution.
2021 Qualifying HDHP Coverage
- Minimum Deductible – Self-only (single) = $1,400; Other than self-only (family) = $2,800
- OOP Maximum – Self-only (single) = $7,000; Other than self-only (family) = $14,000