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Health Savings Account Cost-of-Living Adjustments for 2017

May 03, 2016

The Internal Revenue Service has announced the annual cost-of-living adjustments for health savings account (HSA) contribution limits for calendar year 2017. These limits apply for qualifying high-deductible health plan (HDHP) deductibles and out-of-pocket maximums. With the exception of the single coverage HSA contributions increasing by $50, the limits have not changed. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits.

2016 2017
Limit on HSA Contributions* - single coverage $3,350 $3,350
Limit on HSA Contributions* - family coverage $6,750 $6,750
HDHP Required Minimum Deductible – single coverage $1,300 $1,300
HDHP Required Minimum Deductible – family coverage $2,600 $2,600
HDHP Out-of-Pocket Maximum – single coverage $6,550 $6,550
HDHP Out-of-Pocket Maximum – family coverage $13,100 $13,100

* The figures above do not include the catch-up contribution limit, which is $1,000 for participants age 55 or older. Catch-up contributions can be made any time during the year in which the HSA participant turns 55.

Individuals who participate in an HDHP are permitted a deduction for contributions to HSAs set up to help pay the medical expenses of the participant, spouse, and/or dependents. To be eligible to contribute to an HSA, individuals must participate in an HDHP, which is defined as a health plan with an annual deductible that is not less than the minimum deductibles noted above and for which the annual out-of-pocket expenses, including deductibles, copayments, and other amounts, but excluding premiums, do not exceed the out-of-pocket maximum annually. In addition, individuals may not receive benefits from other health plans that would be construed as impermissible coverage, such as a general-purpose health flexible spending account, certain prescription drug benefits, etc. The limits noted above are subject to an inflation adjustment each year.

For a helpful HSA summary, click here. Also, read our article on how Health Savings Accounts can be an employee benefit cost saving measure.

If you have any questions, or for more information about the 2017 HSA cost-of-living adjustments, please contact Pam Branshaw, Tom KriegBob Buss, or your Wipfli relationship executive.