The IRS has performed their magical inflation calculations for 2017 and updated definitions for High Deductible Health Plan as well as the maximum contribution limit is for Health Savings Accounts (HSA’s). These changes affect who is qualified to open / contribute to an HSA and how much they can contribute.
2017 HDHP Limits
One prerequisite for opening or contributing to a Health Savings Account is that you are covered by HSA eligible insurance, otherwise known as a High Deductible Health Plan (HDHP). The IRS sets limits as to what constitutes an HDHP to define who is HSA eligible or not. Per IRS Rev. Proc 2016-28, for 2017, the IRS has defined a High Deductible Health Plan as:
…a health plan with an annual deductible that is not less than $1,300 for self only coverage or $2,600 for family coverage, and the out of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.
So you need to have an annual deductible greater than $1,300 / $2,600 (self-only / family) to qualify for an HDHP, and thus, an HSA. In addition, your total out of pocket (OOP) expenses cannot exceed $6,550 / $13,100 (self-only, family) for the entire year. As you can see, the folks at the IRS have been hard at work as this represents no change in HDHP limits from 2016 to 2017. The following table compare HDHP limits for the past few years:
|Self-Only Min Deductible||$1,250||$1,300||$1,300||$1,300|
|Self-Only OOP Max||$6,350||$6,450||$6,550||$6,550|
|Family Min Deductible||$2,500||$2,600||$2,600||$2,600|
|Family OOP max||$12,700||$12,900||$13,100||$13,100|
2017 HSA Contribution Limits
The IRS also defines the maximum amounts that may be contributed to a Health Savings Account each year. That amount is updated based on inflation calculations and whatever else the IRS feels like for a given time period. Per IRS Rev. Proc 2016-28, the 2017 HSA contribution limits are:
…the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,400… the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $6,750.
So the cap or maximum contribution amount to your HSA is $3,400 for self-only coverage and $6,750 for family coverage. Note that this does not include the additional 55+ catch up contribution of $1,000 allowed to properly aged HSA holders. Thus, if you are over 55 on or before the end of 2017, you can contribute $4,400 for self-only coverage or $7,750 for family coverage.
As evidenced by the following chart, the IRS has made the slightest change in increasing the 2017 HSA contribution limit by $50 over 2016. You can see the history of HSA contribution limit increases for 2014, 2015, 2016, and now 2017 in the chart below:
|Self-Only HSA Contribution Limit||$3,300||$3,350||$3,350||$3,400|
|Family HSA Contribution Limit||$6,550||$6,650||$6,750||$6,750|
|55+ Additional Contribution Limit||+$1,000||+$1,000||+$1,000||+$1,000|
Note: if you have an HSA, please consider using my service TrackHSA.com to manage your Health Savings Account receipts. You can store purchases, receipts, and reimbursements securely online, tracking the lifecycle of your purchases and audit proofing yourself from the IRS.