2023 HSA Contribution Increase Due to Inflation + New HRA Limits

In response to the rise of inflation rates, the IRS announced this past April that Health savings account (HSA) contribution limits would increase drastically. Employers should keep an eye out for opportunities to match their employee’s contributions and encourage employees to take advantage of the increase.

The new HRA limit also experienced a significant increase – and noticeably the first increase since the EBHRAs were introduced in 2020.

What Are The New HSA and HRA Limits?

Starting in 2023, the new HSA and HRA limits according to the IRS, Revenue Procedure 2022-24 are as follows:

• Maximum HSA Contribution Level (employer + employee): 
  • Self Only: $3,850 ($200 Increase)
  • Family: $7,750 ($450 Increase)
• HSA Catch-Up Contributions (age 55 or older): $1,000 (No change)
• HDHP Minimum Deductibles:
  • Self-Only: $1,500 ($100 Increase)
  • Family: $3,000 ($200 Increase)
• HDHP Maximum Out-of-Pocket Amounts (deductibles, co-payments, not premiums):
  • Self-Only: $7,500 ($450 Increase)
  • Family: $15,000 ($900 Increase)
• HRA Limits: For plans beginning in 2023, the maximum amount employers may contribute to an EBHRA is $1,950 – a $150 increase from its original amount of $1,800 set in 2020. 

Things to Remember for Your HSA Contributions

Outside of contribution limits, HSA contributions have a few specifications that must be met for certain demographics. For example, married couples with HSA-eligible family coverage will share one family HSA limit of $7,750 in 2023. Alternatively, if both spouses have eligible self-only coverage, they may contribute up to $3,850 in separate accounts.

If both spouses with family coverage are 55 or older, they must also have two HSA accounts in separate names if they each would like to contribute their $1,000 catch-up contribution. If only one spouse is 55 or older, but the younger spouse contributes the full family contribution limit, the older spouse must open a separate account for their catch-up contribution.

Lastly, HSA account holders who exceed the contribution limit are subject to an annual 6% excise penalty tax on the excess amount unless it’s removed from their HSA account before the tax deadline of that year.

Check out the full breakdown of HSA and HRA contribution limits on the IRS website here. If you would like to consult with a professional on how these contribution limits can change your business, reach out to ModVenturesLLC today.