HSA Contribution Limits For 2021 And 2022

HSA is a pre-tax account savings account that allows you to set aside money for qualified medical expenses. You can use these funds to pay deductibles, prescription drugs, eyeglasses, or other qualified expenses. You can even use HSA funds to purchase OTC medications.

In most years, IRS announces inflation adjustments for HSA contributions. So what are the HSA contribution limits for 2021 and 2022.

HSA Contribution Limits

2021 Maximum HSA Contribution Limits

  • Individual Plan: $3,600
  • Family Plan: $7,200

2022 Maximum HSA Contribution Limits

  • Individual Plan: $3,650
  • Family Plan: $7,300

Maximum HSA contribution limits include both employee and employer contributions. Keep this in mind as many employers contribute some amount to HSA every year.

HSA Catch-Up Contribution

If you are over 55, the catch-up contribution is $1000 for both individual and family plans for 2021 and 2022.

Requirements To Have An HSA Accounts

High Deductible Plan

To contribute to an HSA plan, you must have a high deductible health plan (HDHP).  As the name implies, HDHP plans have high deductibles. Your HSA account is a way to save for your high deductible expenses.

2021 HDHP Plan limit

Minimum annual deductible – $1400 for individual/$2800 for family
Annual out-of-pocket maximum – $7000 for invdividual/$14,000 for family

2022 HDHP Plan limits

Minimum annual deductible – $1400 for individual/$2800 for family
Annual out-of-pocket maximum – $7050 for invdividual/$14,100 for family

HSA Contribution Deadline

HSA contribution deadline is the same as the tax deadline. So you have until April of the following year to make your HSA contributions for the year (retroactive contributions)

HSA contributions can be changed mid-year if needed

During the open enrollment period, you can set up your HSA contributions. Your employer will withhold your HSA contributions from your paycheck and deposit them in your HSA account. But you can change your HSA contributions anytime during your plan year.

HSA Is A Stealth IRA

HSA accounts are great savings vehicles. You put in pre-tax dollars, you invest your money, withdraw them without paying taxes if you spend them on medical expenses. If you switch jobs, you can take your HSA with you.

Your HSA is a stealth IRA. There is no requirement that you should reimburse yourself immediately after a qualified medical expense occurs. For example, if a medical expense comes up, you can pay it yourself and keep the receipts. You can reimburse yourself in 30 years when your HSA account balance has grown considerably.

At Age 65, Your HSA Can Be Used As An IRA

Let’s say that you don’t have a lot of medical expenses and your account has grown. At age 65, you can pay taxes and withdraw the HSA funds and use them for any purpose. In other words, they become just like a regular IRA.

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