2024 HSA and HDHP changes at a glance
On May 16th, 2023, the IRS announced calendar year 2024 changes to:
- Health Savings Account (HSA) Contribution Limits
- High Deductible Health Plan (HDHP) Annual Minimum Qualifying Employee Deductibles
- High Deductible Health Plan (HDHP) Annual Out-of-Pocket (OOP) Expense Maximums
To make informed decisions for your employees’ healthcare coverage, it is important to take note of these changes and understand their significance.
So, what changed?
- HSA Contribution Limit increase: Single: +$300 | Family: +$550
- HDHP Minimum Qualifying Employee Deductible increase: Single: +$100 | Family: +$200
- HDHP Out-of-Pocket (OOP) Expense Maximum increase: Single: +550 | Family: +1100
What is not changing?
- HSA Catch-Up Contribution Limit (age 55 or older): Remains the same at $1,000
HSA and HDHP Updates
| 2023 | 2024 | $ Change | % Change | |
|---|---|---|---|---|
| HSA Contribution Limit (Employer + Employee) |
Self-only: $3,850 Family: $7,750 | Self-only: $4,150 Family: $8,300 | Self-only: +$300 Family: +$550 | Self-only: +7.8% Family: +7.1% |
| HSA catch-up contributions (age 55 or older) |
$1,000 | $1,000 | N/A | N/A |
| HDHP Minimum Deductibles |
Self-only: $1,500 Family: $3,000 | Self-only: $1,600 Family: $3,200 | Self-only: +$100 Family: +$200 | Self-only: +6.6% Family: +6.6% |
| HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) |
Self-only: $7,500 Family: $15,000 | Self-only: $8,050 Family: $16,100 | Self-only: +$550 Family: +$1,100 | Self-only: +7.3% Family: +7.3% |
What is an HSA?
An HSA is a tax-advantaged savings account which allows employees to save money for medical expenses. It’s composed of funds contributed by the employee, and sometimes also the employer. Contributions made by an employer to an eligible employee’s HSA are excludable from an employee’s income and are not subject to federal income tax, Social Security or Medicare taxes. In addition, employer contributions are deductible as a business expense to the company.
The best part about an HSA is that the funds in it can be used for a wide range of medical expenses, including deductibles, copays, and prescription drugs. And unlike other benefits, the funds in an HSA roll over from year to year, so your employees can continue to save for future medical expenses.
So, if you’re looking for a way to help your employees manage their healthcare expenses and reduce your healthcare costs, consider adding an HSA to your benefits package. It’s a win-win situation for both your business and your employees.
What is an HDHP?
An HDHP is a type of health insurance plan that comes with a high deductible, meaning that employees must pay a certain amount out of pocket before their coverage kicks in. However, HDHPs are typically paired with a Health Savings Account (HSA), which allows employees to save pre-tax dollars for medical expenses. This can be a major benefit for employees, as they can use the funds in their HSA to cover medical expenses even if they haven’t met their deductible.
But how can an HDHP benefit your business? HDHPs typically have lower monthly premiums than traditional health insurance plans. This can help reduce healthcare costs for both your business and your employees.
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