Longer pole …
The IRS just released the news that HSA contribution limits will increase by a whopping $200/$450 (single/family respectively) in a single year. That’s a significant jump over the $50/$100 increases we’ve seen in the last few years.
The 2023 limits are $3,850 (self-only) and $7,750 (family).
As welcome as this news is, the increased savings limit won’t cover the increased cost-sharing limits on your high deductible health plan [HDHP].
… even bigger hole
In order to qualify to make an annual HSA contribution you must be enrolled in a qualifying HDHP. In fact, the point of an HDHP is for individuals to shoulder more of the upfront costs and risks of health care. In return, those same individuals can make tax-advantaged contributions to savings accounts. Those savings can then be used to cover approved medical expenses, if necessary.
Therefore the HSA savings limits and the HDHP cost-sharing limits are directly related — at least in terms of your budget and wallet.
So what’s the bottom line:
- if you’re the only person covered under your health insurance plan, you can save an additional $200 in 2023 — but your MOOP will likely increase up to $450;
- if you have a family plan, your savings bump is $450 — but your MOOP bump is potentially $900.