HDHP and HSA Annual Limits Increase for 2023

The Internal Revenue Service (IRS) recently announced in Revenue Procedure 2022-24 that some of the annual limits affecting high deductible health plans (HDHPs) and health savings accounts (HSAs) will increase for calendar year 2023.

In order to maintain an HDHP's HSA-eligible status, an employer sponsoring an HSA-eligible HDHP in 2023 will need to ensure that the HDHP's annual deductible is at least $1,500 for self-only coverage and $3,000 for family coverage. For calendar year 2022, these amounts were $1,400 for self-only coverage and $2,800 for family coverage.

The maximum annual out-of-pocket expense that can be incurred by a participant in an HDHP has also increased for calendar year 2023 to $7,500 for self-only coverage (up from $7,050 for 2022) and $15,000 for family coverage (up from $14,100 for 2022). These limits apply to all deductibles, co-payments, coinsurance, and other out-of-pocket amounts on a combined basis, but they do not include premiums.

It is important for employers to keep in mind that maximum out-of-pocket expense limits also apply under the Patient Protection and Affordable Care Act of 2010 (ACA) for all "non-grandfathered" employer-sponsored group health plans, even if the plans are not HDHPs. Thus, non-HDHPs may not have out-of-pocket maximums in 2022 that exceed $8,700 for self-only coverage and $17,400 for family coverage. The ACA maximums for 2023 are $9,100 for self-only coverage and $18,200 for family coverage.

The maximum contribution an individual may make to an HSA has also increased. For calendar year 2023, the maximum annual HSA contribution limits are $3,850 for an individual with self-only coverage under an HDHP and $7,750 for an individual with family coverage under an HDHP. The contribution limits for calendar year 2022 were $3,650 and $7,300, respectively. The additional amount that individuals who are age 55 or older may contribute is set by statute and remains at $1,000 for 2023.

For more information about these annual limits, please contact Gary Blachman, Audra Ferguson-Allen, Robert Gauss, Melissa Proffitt, Stan Prybe, Shalina Schaefer, Kathleen Sheil Scheidt, Tara Sciscoe, Chris Sears, or the Ice Miller Workplace Solutions – Employee Benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.