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IRS Announces 2014 Amounts for HSAs, HDHPs, and Out-Of-Pocket Limits

Earlier today, the IRS issued Revenue Procedure 2013-25, announcing the 2014 inflation-adjusted dollar limitations applicable to health savings accounts (“HSAs”) and qualifying high deductible health plans (“HDHPs”).

The maximum HSA contribution for an individual with self-only coverage under an HDHP will increase to $3,300 – up from $3,250 in 2013.  The maximum HSA contribution for an individual with family HDHP coverage will be $6,550 – up from $6,450 in 2013.  The “catch-up contribution” limit, for individuals who will attain age 55 by the end of the year, will remain at $1,000.

To qualify as an HDHP, a plan must specify a minimum annual deductible amount, with that amount based on whether the coverage is self-only or family.  These deductible amounts will be unchanged from 2013.  Thus, for self-only coverage the 2014 annual deductible must be no less than $1,250, while for family coverage the annual deductible must be no less than $2,500.

Finally, the total annual out-of-pocket expenses (deductibles, co-payments, and other amounts – but not premiums) for 2014 may not exceed $6,350 for self-only coverage or $12,700 for family coverage.  As discussed in our April 2013 article, these are the 2014 maximum out-of-pocket limits for “essential health benefits” provided under all non-grandfathered health insurance plans and policies.

Sponsors of HSA arrangements and/or HDHPs will want to incorporate these new dollar amounts into their 2014 open enrollment materials.  Additionally, sponsors of any non-grandfathered health plans will want to revise those plans for 2014 to incorporate the maximum out-of-pocket limits for “essential health benefits” – and may also want to include inflation-adjustment language with respect to future years.  Those sponsors will also want to update their 2014 open enrollment materials to reflect the out-of-pocket limits.