Earlier today, the IRS announced updated inflation-adjusted figures for Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs). Here’s what you need to know to plan your contributions and understand the qualifying criteria for the upcoming year:
Health Savings Accounts (HSAs):
For those with self-only coverage under a high deductible health plan, the annual contribution limit to an HSA will be $4,300. If you have family coverage, the limit increases to $8,550. These adjustments provide an opportunity to set aside more pre-tax dollars to cover medical expenses.
Qualifying for an HSA:
The definition of a high deductible health plan (HDHP) for 2025 specifies a minimum annual deductible of $1,650 for self-only coverage and $3,300 for family coverage. The maximum out-of-pocket expenses, which include deductibles, co-payments, and other amounts (but not premiums), are capped at $8,300 for self-only coverage and $16,600 for family coverage.
Health Reimbursement Arrangements (HRAs):
For plan years beginning in 2025, the maximum amount that can be newly available for an excepted benefit HRA is $2,150. This adjustment allows for an increase in the funds available to employees for specific health-related expenses under an HRA plan.
These updates reflect changes due to inflation and aim to help individuals and families manage their health care spending. It’s important to consider these new limits when employers consider and communicate health plans for 2025.
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