ComplianceTax & AccountingJune 04, 2020

Health Savings Accounts: 2021 Cost-of-Living Adjustments

On Wednesday, May 20, 2020 the Internal Revenue Service (IRS) released Revenue Procedure 2020-32 announcing the cost-of-living adjustments (COLAs) applicable to Health Savings Accounts (HSAs) for 2021.

After application of the COLA rules, changes for 2021 include an increase in the contribution limits applicable to individuals who have self only or family high-deductible health plan (HDHP) coverage. Additionally, though the minimum deductible amount that plays a role in determining whether a health plan is an HSA eligible HDHP will not increase for 2021, the maximum out-of-pocket expense limit that plays a role in determining whether a health plan is an HSA eligible HDHP will increase.

The following tables indicate the HSA regular contribution limits for 2021 and 2020:

HSA Regular Contribution Limits for 2021
HDHP Coverage Standard Limit Catch-Up Contribution Contribution Limit if Age 55 or Older
Self-Only $3,600 $1,000 $4,600
Family $7,200 $8,200
HSA Regular Contribution Limits for 2020
HDHP Coverage Standard Limit Catch-Up Contribution Contribution Limit if Age 55 or Older
Self-Only $3,550 $1,000 $4,550
Family $7,100 $8,100
The following tables indicate the HDHP minimum deductible and maximum out of pocket expense amounts for 2021 and 2020:
HDHP Requirements for 2021
HDHP Coverage Minimum Deductible Out-of-Pocket Expense Limit
Self-Only $1,400 $7,000
Family $2,800 $14,000
HDHP Requirements for 2020
HDHP Coverage Minimum Deductible Out-of-Pocket Expense Limit
Self-Only $1,400 $6,900
Family $2,800 $13,800

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider our on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or call us at 1-800-552-9408.

Mike Schiller
Manager, Specialized Consulting, Tax Advantaged Accounts
With more than 22 years of experience, Mike has worked closely with hundreds of financial organizations to help them create, implement, and maintain their tax-advantaged accounts program.