- Posted by Jessica Waltman
- On May 27, 2020
The Internal Revenue Service (IRS) recently released Revenue Procedure Notice 2020-32, which sets the 2021 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). In 2021, HSA owners with individual coverage will be able to contribute $3,600 (an increase of $50 from 2020). Those with family coverage may contribute up to $7,200, a $100 increase from the year before. The catch-up contribution limit remains steady at $1000.
To contribute to an HSA, a person must be under age 65 and have a qualified HDHP. For 2021, the minimum self-only HDHP deductible will be $1,400, and the minimum deductible for other coverage will be $2,800. Both of these deductible minimums are unchanged from 2020.
Maximum-out-of-pocket cost limits apply to every kind of major medical coverage, including fully-insured and self-funded plans. Still, the thresholds for HDHP plans are different than other ACA-compliant health plans. In 2021, those with self-only HDHP coverage will have a $7000 limit. The maximum out-of-pocket payment level for those with family HDHP coverage will be $14,000.
As a reminder, earlier this month, the Department of Health and Human Services released the 2021 maximum annual out-of-pocket limits on cost-sharing for all other types of individual and group health insurance plans. In 2021, these limits will be $8,550 for self-only coverage and $17,100 for other than self-only coverage. These levels represent a 4.9% increase over 2020 (when the thresholds were $8,150 for self-only coverage and $16,300 for other than self-only coverage).
For individuals who qualify for individual market cost-sharing reductions based on income and buy coverage through an exchange, the reduced 2021 limit will be $2,850 for self-only coverage for people with family household incomes below 200% of the federal poverty level (FPL). The family coverage limit for that income group will be $5,700. Individuals with incomes between 201-250% of FPL will have limits of $6,800 for single coverage and $13,600 for family coverage.