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IRS Announces 2020 HSA and HDHP Limits

On May 28, 2019, the Internal Revenue Service (IRS) announced in Revenue Procedure 2019-25 the 2020 health savings account (HSA) annual contribution limit and the 2020 high deductible health plan (HDHP) definitional limit per Internal Revenue Code Section 223. Limits have been increased for 2020 as follows:

  • For 2020, a HDHP is defined as “a health plan with an annual deductible that is not less than $1,400 for self-only coverage and $2,800 for family coverage.”

  • For 2020, HDHP annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) cannot exceed $6,900 for self-only coverage and $13,800 for family coverage.

  • The 2020 annual contribution limit to an HSA for individuals with self-only coverage under a HDHP is $3,550, and for an individual with family coverage under a HDHP, the HSA contribution limit is $7,100.

The following table is a comparison of the 2019 and 2020 limits:

 

2020 Individual

2020 Family

2019 Individual

2019 Family

 HSA Contribution Adjusted Limit

$3,550

$7,100

$3,500

$7,000

 HDHP Deductible Adjusted Limit

$1,400

$2,800

$1,350

$2,700

 HDHP Out-of-Pocket Adjusted Limit

$6,900

$13,800

$6,750

$13,500

Employers that sponsor a health plan that includes an HDHP/HSA option may want to revise their plan participant communications to make sure they are updated accordingly, as well as ensure that 2020 open enrollment materials properly reflect these limits.

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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About this Author

Shareholder

Jason Rothman is a shareholder in the Cleveland office of Ogletree Deakins. As a member of the employee benefits practice group, Jason advises firm clients on all areas of employee benefits and executive compensation compliance. He advises clients on their tax-qualified plans including plan design and adoption, day-to-day plan operation, fiduciary compliance, IRS and DOL plan audits and submissions under the Employee Plans Compliance Resolution System (EPCRS), the Voluntary Fiduciary Correction Program, and the Delinquent Filer Voluntary Compliance Program. In addition, Jason advises...

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