The Internal Revenue Service recently announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2021. Some of the dollar limits currently in effect for 2020 will change for 2021.
Recently, the Internal Revenue Service (IRS) announced (see Revenue Procedure 2020-32) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2021. Many of the dollar limits currently in effect for 2020 will change for 2021. The HSA catch-up contribution for individuals age 55 or older will not change as it is not subject to cost-of-living adjustments.
The table below compares the applicable dollar limits for HSAs and HDHPs for 2020 and 2021.
| HEALTH AND WELFARE PLAN LIMITS |
2020 |
2021 |
| HDHP – Maximum annual out-of-pocket limit (excluding premiums) |
| Self-only coverage |
$6,900 |
$7,000 |
| Family coverage |
$13,800 |
$14,000 |
| HDHP – Minimum annual deductible |
| Self-only coverage |
$1,400 |
$1,400 |
| Family coverage |
$2,800 |
$2,800 |
| HSA – Annual contribution limit |
| Self-only coverage |
$3,550 |
$3,600 |
| Family coverage |
$7,100 |
$7,200 |
| Catch-up contributions (age 55 and older) |
$1,000 |
$1,000 |
Next Steps
Plan sponsors should update payroll and plan administration systems for the 2021 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, such as open enrollment and communication materials, plan documents, and summary plan descriptions.
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