Health Savings Account deduction limits get another big bump

Inflation-adjusted amounts for health savings accounts are headed up — and up — again.

In Revenue Procedure 2023-23, the Internal Revenue Service said for calendar year 2024, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $4,150, up from $3,850 for this year. That is up $200 from 2022, after climbing only $50 from 2021.

For 2024, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $8,300, up from $7,750 in 2023. This year’s figure was also up $450 from 2022.

Other HSA numbers saw similarly higher hikes.

For 2024, a “high-deductible health plan” will be defined as a health plan with an annual deductible that is not less than $1,600 for self-only coverage (up $100 from 2023) or $3,200 for family coverage (up $200 from $3,000 in 2023), and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,050 for self-only coverage (up $550 from 2023) or $16,100 for family coverage (up $1,100 from this year’s $15,000).

The increases reflect stubbornly high inflation that has hit levels unseen in decades.