Hi everyone,
Health Savings Accounts (HSA) are an ever-evolving benefit that have different moving parts and rules regarding eligible medical plans and HSA contributions. We thought we’d simplify the process for you here.
Let’s start with some of the mechanics related to the health plans you must have in place BEFORE you can open or contribute to an HSA. Here’s a quick table from our friends over at the IRS.
The 2023 amounts for HSAs as compared to 2022 are as follows:
So what in the world does this all mean?
For your health plan to be HSA eligible, it has to check all of the boxes above. Believe it or not, we are seeing some plans from different insurance companies and benefits providers that have out of pockets that are so high that they do not qualify as HSA-eligible plans any longer. In plain English, to be HSA compatible, a plan has to have a deductible of $1500 or more at the individual level. The family deductible has to be $3000 or more. That’s typically not a problem. You don’t tend to see HSA’s with deductibles below $3K within the client and vendor base that we work in.
Also, remember, an HSA eligible plan is NOT going to have any first dollar benefits (no copay), so all costs incurred get applied to your deductible, then the insurance will kick in. The one exception on an HSA plan is for preventive care. As long as you are (1) in-network and (2) getting your annual checkup, and (3) the doctor file the claim as such, that will be 100% covered by your health plan. EVERYTHING else goes to the deductible first, which is the thought behind allowing people to contribute to an HSA to cover some, if not all, of their out-of-pocket costs with pre-tax dollars.
The other component here is the out-of-pocket maximum. These changed from 2022 to 2023, so at the individual level, these cannot EXCEED $7500 for 2023, and at the family level, they cannot exceed $15,000.
Please note that the deductibles are the minimum amounts and the out-of-pocket limits are the maximum amounts.
We’re starting to see plans with deductibles and out-of-pockets around the $8K range, making those plans non-HSA compatible.
Here are the amounts and items everyone really cares about, especially those who contribute each year and save up in their little healthcare 401k accounts (this is what one of our HSA providers likes to call HSA’s).
The 2023 amounts for HSAs as compared to 2022 are as follows:
Due to inflation, for 2023, we are seeing a bigger jump than we normally see on the allowed contribution limits. Historically these amounts have only gone up $50 for individuals and $100 for families, but in 2023 we’re seeing a $200 jump at the individual level and a $450 increase for families. This is a welcomed change. We continue to see deductibles, out-of-pockets, and the costs of healthcare increasing significantly, so this will allow for some additional relief / pre-tax savings for those that are making the maximum contributions each year. For those over age 55, no change there for 2023, unfortunately. The maximum additional contribution you can make for being 55 or older is still only $1000. Would love to see the IRS increase that at some point as well. In my opinion, this should get increased just like all the other amounts do to help those who are closer to retirement.
And last but not least, the out-of-pocket maximums for NON-HSA plans in 2023 will not increase.
NON-HSA 2023 Out of Pocket amounts as compared to 2022 are as follows:
We fully anticipated deductibles and out-of-pockets to continue to rise in 2023. This ultimately puts more financial burden on policyholders (middle America). All the while, hospital systems, insurers, and pharmacy companies continue to make record profits.
Thanks for the read! If you have any questions about anything we covered in this article, give us a shout.
