FSAs, HSAs, and HRAs

The Affordable Care Act (ACA) introduced provisions affecting flexible spending arrangements (FSAs), health savings accounts (HSAs) and health reimbursement arrangements (HRAs):

• For taxable years beginning in 2025, the dollar limitation on employee salary reductions for contributions to health FSAs is $3,300.
• For taxable years beginning in 2024, the dollar limitation on employee salary reductions for contributions to health FSAs is $3,200.
• For taxable years beginning in 2023, the dollar limitation on employee salary reductions for contributions to health FSAs is $3,050.

2024 Indexed Amounts for HSAs and HDHPs

The IRS released the 2024 inflation-adjusted contribution limits for health savings accounts (HSAs), as well as the deductible and out-of-pocket spending limits for high-deductible health plans (HDHP).

For self-only coverage:

• The annual HSA contribution limit is $4,150, a $300 increase from $3,850 in 2023.
• The annual catch-up contribution for those 55 years and over is $1,000*.
• The annual deductible for an HDHP must be a least $1,600, up $100 from $1,500 in 2023.
• The annual out-of-pocket limit for an HDHP may not exceed $8,050, a $550 increase from $7,500 in 2023.

For family coverage:

• The annual HSA contribution limit is $8,300, a $550 increase from $7,750 in 2023.
• The annual catch-up contribution for those 55 years and over is $1,000*.
• The annual deductible for an HDHP must be at least $3,200, a $200 increase from the previous year.
• The annual out-of-pocket limit for an HDHP may not exceed $16,100, a $1,100 increase from $15,000 in 2023.

The revised limits, issued in Revenue Procedure 2023-23, become effective for plan years beginning in 2024.