IRS Announces Inflation-Adjusted HSA Numbers for 2021

In Rev. Proc. 2020-32, the IRS provides the 2021 inflation-adjusted amounts for Health Savings Accounts. These changes are for calendar year 2021:

• The annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,600.
• The annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,200.
• A "high deductible health plan" is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage

HSAs are savings accounts that employees can use with a high-deductible health plan to help cover higher deductibles and copays. There are multiple advantages to such a system. Money in HSAs can be used for a wide range of medical expenses, including — but not limited to — the deductibles under the HDHPs. Qualified medical expenses also include dental services, vision care, prescription drugs, co-pays, psychiatric treatments and other qualified medical expenses not covered by a health insurance plan.

If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional.  You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford), or email us at info@cironefriedberg.com.
 

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