Health Savings Account (HSA) and High Deductible Health Plan (HDHP) limits will increase in 2024, according to a recent announcement made by the Internal Revenue Service (IRS).

IRS Revenue Procedure 2023-23 disclosed the 2024 inflation-adjusted limits for HSAs and HDHPs, which include the maximum contribution limit for HSAs, the minimum deductible amount for HDHPs as well as the maximum out-of-pocket expense limit for HDHPs

2024 HSA Limits

Contribution limits vary depending on the type of coverage an individual chooses. Those with self-only HDHP coverage will be eligible to contribute $4,150 to their HSAs for 2024, which is a $300 increase from $3,850 in 2023. Those with family HDHP coverage will be eligible to contribute $8,300 to their HSAs for 2024, a $550 increase from $7,750 in 2023. Additionally, those aged 55 or older may contribute an extra $1,000 "catch-up" to their HSAs.

2024 HDHP Limits

In 2024, the minimum deductible amount for High Deductible Health Plans (HDHPs) will increase to $1,600 for those with self-only coverage and $3,200 for those with family coverage. This is a slight increase from the previous year's deductible amount of $1,500 for self-only and $3,000 for family coverage. In addition, the maximum out-of-pocket expense limit for HDHPs will also increase to $8,050 for self-only coverage and $16,100 for family coverage in 2024, up from $7,500 for self-only coverage and $15,000 for family coverage in 2023.

Action Steps for Employers

As the plan year commencing in 2024 approaches, employers sponsoring HDHPs should assess their plan's cost-sharing limits, including minimum deductibles and maximum out-of-pocket expenses. In addition, employers permitting employees to make pre-tax HSA contributions should update their plan communications to reflect the raised contribution limits.