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HSA Contribution Limits for 2017

Guidance for health savings account 2017 contributions were recently released by the Internal Revenue Service. The maximum allowable contribution individuals can make to their HSA is remaining the same in 2017 as it was in 2016 at $6,750 for those who have family coverage under a high deductible health plan.  This means that more of an employee’s salary can go untaxed by the government if put toward a high deductible health plan.

In Revenue Procedure 2016-28, issued April 29, the IRS provided the inflation-adjusted HSA contribution limits effective for calendar year 2017, along with minimum deductible and maximum out-of-pocket expenses for the high-deductible health plans (HDHPs) that HSAs are coupled with.

Harry Sit, CEBS, editor of the Financial Buff Blog, explained the process in which the IRS modifies spending limits for employees, quoted below.

“The contribution limits for various tax advantaged accounts for the following year are usually announced in the fall, except for HSAs, which come out in the spring,” explained Harry Sit, CEBS, who edits The Financial Buff blog. “Due to mild inflation and rounding rules, the 2017 HSA contribution limit for family coverage will stay unchanged.”

Additionally, those with individual coverage see an increase to $3,400 contribution limit, $50 higher than in 2016.

HSAs while paired with a HDHP are tax-advantaged accounts to which employees and employers may contribute funds for employees’ health benefit expenses. Individuals can claim tax deductions up to the limits for contributions they make to the accounts when filing their annual income tax returns.

The deductibles are not changing for 2017.  They remain at a minimum of $2,600 for family coverage and $1,300 for individual coverage. The change comes in the form of their out-of-pocket expenses. Those with family coverage will have an out-of-pocket maximum of $13,100 and those with individual coverage will be at $6,550.

A little more than last year’s out-of-pocket limits, which were $12,900 for families and $6,450 for individuals.  These new numbers can be communicated to employees or plan members during open enrollment.

As part of its blog, the Society for Human Resources Management (SHRM) offered a table comparing the limits in 2016 and 2017.

Contribution and Out-of-Pocket Limits
for Health Savings Accounts and High-Deductible Health Plans
For 2016 For 2017 Change
HSA contribution limit (employer + employee) Self-only: $3,350

Family: $6,750

Self-only: $3,400

Family: $6,750

Self-only: +$50

Family: no change

HSA catch-up contributions (age 55 or older)* $1,000 $1,000 No change**
HDHP minimum deductibles Self-only: $1,300

Family: $2,600

Self-only: $1,300

Family: $2,600

Self-only: no change

Family: no change

HDHP maximum out-of-pocket amounts(deductibles, co-payments and other amounts, but not premiums) Self-only: $6,550

Family: $13,100

Self-only: $6,550

Family: $13,100

Self-only: no change

Family: no change

* Catch-up contributions can be made any time during the year in which the HSA participant turns 55.

** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.

How Does this Compare to HHS-Set Limits?

HHS published its 2017 ACA out-of-pocket limits in the Federal Register on March 8, 2016, in its Notice of Benefit and Payment Parameters for 2017 final rule.

Limits for 2017 are shown below:

  • Individual Out of Pocket Limits for ACA-Compliant Plans (HHS): $7,150 (+$300)
  • Family Out of Pocket Limits for ACA-Compliant Pans (HHS): $14,300 (+$600)

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