- Posted by Jessica Waltman
- On June 14, 2019
The Internal Revenue Service (IRS) recently issued Revenue Procedure 2019-25, establishing the 2020 dollar limits for health saving account (HSA) contributions and the minimum deductible and maximum out-of-pocket limits for qualified high-deductible health plans (HDHPs).
HSAs are subject to annual aggregate contribution limits, although people who are 55 and older can contribute slightly more each year as a “catch-up” contribution. In 2020, HSA owners with individual coverage will be able to contribute $3,550, and those with family coverage may contribute up to $7,100, which are both increases from 2019. The catch-up contribution limit remains steady at $1000.
To be able to contribute to an HSA, a person must be under age 65 and enrolled in a qualified HDHP. The underlying health plan must have a minimum deductible level to be considered an HDHP, and the annual out-of-pocket cost maximum for an HDHP may be higher than other plans. For 2020, the minimum self-only HDHP deductible will be $1,400, and the minimum deductible for family coverage will rise to $2,800. The maximum out-of-pocket limits for HDHP plans are different than other ACA-compliant health plans, and in 2020, those with self-only HDHP coverage will have a $6,900 limit. The maximum out-of-pocket payment level for those with family HDHP coverage will be $13,800.