2019 IRS HSA Contribution Limits and Definitions

The 100+ person team (kidding?) at the IRS has cranked their magic number machine and released their 2019 HSA limits and definitions. This includes the 2019 HSA Contribution Limits as well as the 2019 HDHP Definitions for Minimum Annual Deductible and Out of Pocket Maximum. These amounts govern 1) how much can be contributed to an HSA and 2) what qualified as an HSA for 2019. Overall, they have done a good job and it will be a good year for HSA savers as well as new people looking to establish an HSA for the first time. The IRS sets limits each year for maximum contributions to each type of account-based benefit.

• Please consult with your own legal professional to ensure compliance with all applicable law.
• This may be a trend and we hope it continues, since it improves the population’s ability to manage their care in an environment of insane health care costs.
• HSAs are a popular savings and investment tool thanks to several benefits.
• Like most tax-advantaged accounts, there are legal limits to how much you can contribute to an HSA each year.
• These limits encouraged many people to start thinking seriously about their healthcare financing.
• The out-of-pocket maximum, or out-of-pocket limit, is the most you must pay each year for covered medical expenses.

Transportation Fringe Benefits:

Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded. The best strategy (or strategies) for you depends on your age, income, average medical expenses per year, the details of your HDHP, and other factors.

Contribute up to Your Health Plan Deductible

First off, all contributions are considered „pre-tax,” so every dollar you contribute reduces your taxable income. Any contributions an employer makes to your HSA (including contributions made through a cafeteria plan) are also excluded from your gross income. Yet the hidden benefit to HSAs comes from the tax-free growth that they offer.

For example, those who will be 55 by the end of 2019 and have self-only coverage will be able to contribute and deduct up to $4,500 with an HSA. ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice.

Why HSAs are a great deal

• Finally, an HSA is portable, meaning it stays with you if you change employers or leave the workforce.
• „And you’ll be paying it with tax-free money, reducing the impact of future health care costs.”
• Based on annual contribution limits, it may take more than one year to reach this amount.
• By fully aligning under the IMA brand, we unite national insight with the close-knit attention of your local Parker, Smith & Feek team.
• Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
• The limits on annual deductibles are also subject to annual inflation adjustments.

Like most tax-advantaged accounts, there are legal limits to how much you can contribute to an HSA each year. The maximum contribution limits for 2025 got a significant boost over last year. For 2025, you can contribute a maximum of $4,300 for self-only coverage and up to $8,550 for family coverage.

IRS guidelines, contribution limits and eligible expenses

HSAs are designed to help people save for healthcare expenses by using high-deductible health insurance policies. These policies, known as HDHPs for short, typically feature extremely low monthly premiums in exchange for coverage that only kicks in after you pay a sizable amount toward your own healthcare costs. Every year, the guidelines for HSAs change modestly, and those who want to take full advantage of the accounts need to update their plans accordingly. Your health plan deductible is the sum you must pay for medical expenses before your insurance kicks in. For 2025, the deductible must be at least $1,650 for an individual and $3,300 for a family.

Unite Here Retirement Fund to Receive $868.6M SFA Grant

Employer-Sponsored Plans are not individually owned and amounts available under the Employer-Sponsored Plan are not FDIC insured. After age 65, you can begin using your HSA, much like any retirement account. If you withdraw money from your HSA for non-medical expenses, the 20% penalty no longer applies. HSAs are a popular savings and investment tool thanks to several benefits.

Are Health Plans Required to Cover Emergency Contraceptives?

Use this information as a reference, but please visit IRS.gov for the latest updates. Catch-up contributions are also allowed for those who are 55 or older. If you qualify, you can add $1,000 to the applicable contribution limit above.

Whether you get reimbursed or use a distribution to pay directly, keep receipts—proper documentation may be required to prove adequate use of HSA funds. Marcotte advised further that „if your employer’s HSA doesn’t offer the ability to invest, you can freely roll your balance 2019 hsa contribution and coverage limits to a new provider.” HSA Tax Time 101 is a resource that provides answers to some of the most frequently asked Health Savings Account (HSA) tax questions. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Take your career to the next level and join the growing community of agents who have found it very rewarding to work with AHCP. For more information on Health Savings Accounts or the products you should sell alongside an HSA-qualified plan, contact AHCP today.