IRS Announces HSA Limits for 2020
The IRS announced the 2020 maximum contribution levels for health savings accounts (HSAs) and out-of-pocket spending limits and deductible minimums for High Deductible Health Plans (HDHPs) that must be used in conjunction with HSAs [Rev. Proc. 2019-25, 2019-22 IRB 1261].
The annual cost-of-living adjustments are released by June 1 for the following year.
2020 annual contribution levels for HSAs:
- The maximum annual HSA contribution for an eligible individual with self-only coverage is $3,550 ($3,500 in 2019).
- For family coverage, the maximum annual HSA contribution is $7,100 ($7,000 in 2019).
2020 amounts for out-of-pocket spending on HSA-compatible HDHPs:
- The maximum annual out-of-pocket amount for HDHP self-only coverage is $6,900 ($6,750 in 2019), and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $13,800 ($13,500 in 2019).
2020 minimum deductible amounts for HSA-compatible HDHPs:
- The minimum deductible for HDHPs is $1,400 ($1,350 in 2019) for self-only coverage and $2,800 ($2,700 in 2019) for family coverage.
A fiscal year plan that satisfies the requirements for an HDHP on the first day of the first month of its fiscal year may apply that deductible for the entire fiscal year.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!