Given the cost and importance of healthcare coverage, most of us are carefully reviewing our current plans and what will work best for us in 2016. Health Savings Accounts (HSAs) play a critical role in managing healthcare dollars wisely, including multiple tax benefits and long-term investment opportunities. Many HSA participants choose to contribute as much as possible to their accounts, in order to take advantage of all the possible upsides, and in order to do so, they need to know how much they can legally put into their account.
The IRS has provided information on the inflation-adjusted limits of HSA contributions that can be made in 2016, including:
• Maximum HSA contribution limit
• Minimum deductible amount for high deductible health plans (HDHPs)
• Maximum out-of-pocket expense limit for HDHPs
HSA Contribution Limits for 2016 are $3,350 for Individuals (same as 2015) and $6,750 for families (up $100 from 2015). Minimum HDHP deductible amounts qualifying for HSAs have not changed from 2015: a) $1,300 for individuals and b) $2,600 for families. Out-of-pocket expense limits on HDHPs for individuals have increased by $100, to $6,550, and for families, they have increased by $200, to $13,100.
And good news for those who are 55 or older: the $1,000 catch-up contribution is available to you also. This means you can make an additional $1,000 contribution to your HSA account. This applies to anyone turning 55 or older during the plan year.