IRS Announces 2017 HSA Contribution Limits, HDHP Minimum Deductibles,
and HDHP Out-of-Maximums
The IRS has released the 2017 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). Here are the details:
- HSA Contribution Limits. The 2017 annual HSA contribution limit for individuals with self-only HDHP coverage is $3,400, and the limit for individuals with family HDHP coverage is $6,750.
- HDHP Minimum Deductibles. The 2017 minimum annual deductible for self-only HDHP coverage is $1,300 and the minimum annual deductible for family HDHP coverage is $2,600.
- HDHP Out-of-Pocket Maximums. The 2017 maximum limit on out-of-pocket expenses (including items such as deductibles, copayments, and coinsurance, but not premiums) for self-only HDHP coverage is $6,550, and the limit for family HDHP coverage is $13,100.
The $50 increase in the annual HSA contribution limit for individuals with self-only HDHP coverage is the only change from 2016. All of the other amounts are unchanged.
EBIA* Comment: Because the HDHP out-of-pocket maximums will not increase in 2017, the increased contribution limit for individuals with self-only coverage will allow those individuals to use pre-tax HSA dollars to pay for a slightly higher proportion of their out-of-pocket expenses in 2017. Stability in the out-of-pocket maximums will also open a wider gap between the HSA limit and the higher, overall cost-sharing limit imposed by health care reform on non-grandfathered, non-excepted group health plans, including HDHPs. But while the health care reform limits are nominally higher, plan sponsors need to remember that those limits have been interpreted in a way that could substantially reduce the uncovered expenses of some individuals with family coverage.
*Employee Benefits Institution of America
Rev. Proc. 2016-28 (Apr. 28, 2016)
Available at http://www.irs.gov/pub/irs-drop/rp-16-28.pdf