2020 HSA Contribution Limits Announced

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On May 28, 2019, the IRS issued updated Health Savings Account (HSA) contribution limits for 2020.  These limits have been adjusted for inflation.

Health Savings Account Contribution Limits for 2020:

  • $3,550 for individuals in a high deductible health plan (HDHP) with self-only coverage. This is an increase of $50 from $3,500 in 2019.
  • $7,100 for individuals covered under a family HDHP. This is an increase of $100 from $7,000 in 2019.

In order to participate in an HSA, you must be enrolled in a high deductible health plan.  The IRS also adjusts minimum deductibles and maximum out-of-pocket expenses for inflation, as seen below.

  2020 HDHP Minimum Deductible 2020 HDHP Maximum Out-of-Pocket Expenses
Individual with self-only coverage

 

$1,400 $6,900
Individual with family coverage

 

$2,800 $13,800

 

HSAs can be an effective way to reduce the cost of healthcare.  HSA withdrawals to pay for qualified medical costs are not taxed.  In addition, HSAs grow tax-deferred and the money rolls over from year-to-year.

For more information, please reach out to your ABBB advisor.