IRS Announces Increase in 2023 Limits for HSAs and High-deductible Health Plans

Health savings account (HSA) contribution limits for 2023 are going up significantly in response to the recent inflation surge, the IRS announced April 29, giving employers that sponsor high-deductible health plans (HDHPs) plenty of time to prepare for open enrollment season later this year.

The annual inflation-adjusted limit on HSA contributions for self-only coverage will be $3,850, up from $3,650 in 2022. The HSA contribution limit for family coverage will be $7,750, up from $7,300. The adjustments represent approximately a 5.5 percent increase over 2022 contribution limits, whereas these limits rose by about 1.4 percent between 2021 and 2022.

In Revenue Procedure 2022-24, the IRS confirmed HSA contribution limits effective for calendar year 2023, along with minimum deductible and maximum out-of-pocket expenses for the HDHPs with which HSAs are paired.

Contribution and Out-of-Pocket Limits
for Health Savings Accounts and High-Deductible Health Plans
2023 2022 Change
HSA contribution limit (employer + employee) Self-only: $3,850
Family: $7,750
Self-only: $3,650
Family: $7,300
Self-only: +$200
Family: +$450
HSA catch-up contributions (age 55 or older) $1,000 $1,000 No change
(set by statute)
HDHP minimum deductibles Self-only: $1,500
Family: $3,000
Self-only: $1,400
Family: $2,800
Self-only: +$100
Family: +$200
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) Self-only: $7,500
Family: $15,000
Self-only: $7,050
Family: $14,100
Self-only: +$450
Family: +$900
Source: IRS, Revenue Procedure 2022-24.

HSA Contribution Reminders

  • Married couples with HSA-eligible family coverage will share one family HSA contribution limit of $7,750 in 2023. If both spouses have eligible self-only coverage, each spouse may contribute up to $3,850 in separate accounts.
  • If both spouses with family coverage are age 55 or older, they must have two HSA accounts in separate names if they each want to contribute an additional $1,000 catch-up contribution.
  • If only one spouse is 55 or older but the younger spouse contributes the full family contribution limit to the HSA in his or her name, the older spouse must open a separate account to make the additional $1,000 catch-up contribution.
  • Account holders who exceed the contribution limit are subject to an annual 6 percent excise penalty tax on the excess amount unless it is withdrawn from the HSA before the tax deadline for that year.

ACA’s Limits Differ

There are two sets of limits on out-of-pocket expenses for health plans, determined annually by federal agencies, which can be a source of confusion for plan administrators.

The Department of Health and Human Services (HHS) establishes annual out-of-pocket or cost-sharing limits for essential health benefits covered under an ACA-compliant plan, excluding grandfathered plans.

Below is a comparison of the two sets of limits:

 

2023

2022

Maximum out-of-pocket for ACA-compliant plans (HHS)

Self-only: $9,100

Family: $18,200

Self-only: $8,750

Family: $17,400

Maximum out-of-pocket for HSA-qualified HDHPs (IRS)

Self-only: $7,500

Family: $15,000

Self-only: $7,050

Family: $14,100