health savings accounts

HSA Contribution Limits for 2022 Are Out

The IRS released the contribution limits, annual deductibles for health plans, and out-of-pocket expense limits for 2022 health savings accounts.

You might not be thinking about next year's health insurance yet, but the IRS just released inflation-adjusted amounts that will apply to health savings accounts (HSAs) in 2022. HSAs are becoming more popular each year in part because of the tax breaks that come with them. For instance, you can deduct contributions to an HSA (even if you don't itemize), employer contributions aren't included in your taxable income, money in your HSA grows tax free, and distributions aren't taxed if you use them to pay qualified medical expenses.

There are a handful of HSA limitations and requirements that you need to worry about, though. They're adjusted each year for inflation. They apply to the amount you can contribute to an HSA for the year, the minimum deductible for your health insurance plan, and your annual out-of-pocket expenses. If you or your health plan don't comply with the restrictions, then you'll lose the HSA tax savings for that year.

For 2022, the annual contribution limit for self-only coverage increases from $3,600 to $3,650. If you have family coverage, the limit jumps from $7,200 to $7,300 next year. If you're 55 or older at the end of 2022, you can put in an extra $1,000 in "catch up" contributions (that's the same amount allowed in 2021).

You also must be covered under a high deductible health plan to participate in an HSA. For 2022, the health plan must have a deductible of at least $1,400 for self-only coverage or $2,800 for family coverage. Those minimums are the same as the ones in place for 2021.

The out-of-pocket medical expenses that you're required to pay under the health plan have limits, too. For 2022, the out-of-pocket limit for self-only coverage will go from $7,000 to $7,050. For family coverage, the increase will be from $14,000 to $14,100.

For more on annual HSA requirements, see HSA Contribution Limits and Other Requirements.

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