IRS Releases 2021 HSA and High Deductible Health Plan (HDHP) Limits

The Internal Revenue Service (IRS) has released Notice 2020-32, which sets the 2021 dollar limits for health saving account (HSA) contributions and the minimum deductible and maximum out-of-pocket limits for qualified high-deductible health plans (HDHPs).

  • 2021 HSA Contribution Limits: HSA owners with individual coverage will be able to contribute $3,600 (an increase of $50 from 2020) and those covering dependents may contribute up to $7,200 (a $100 increase from 2020).  The catch-up contribution for enrollees over age 55 remains unchanged at $1000. To contribute to an HSA, an individual must be under age 65 and be enrolled in a qualified HDHP.
  • 2021 HDHP Deductible Limits: the minimum deductible for self-only coverage will be $1,400, and $2,800 if covering dependents (unchanged from 2020).
  • 2021 Maximum-Out-of-Pocket (MOOP) Limits: the thresholds for HDHP plans are different than other Affordable Care Act compliant health plans. In 2021, those with self-only HDHP coverage will have a $7k out-of-pocket limit and those covering dependents in a HDHP will have a $14k limit. (The 2021 MOOP limits for all other types of individual and group health insurance plans will be $8,550 for self-only coverage and $17,100 for those covering dependents.) Note: individuals who qualify for individual market cost-sharing reductions based on income and buy coverage through an exchange will have a reduced 2021 limit of $2,850 for self-only coverage (those with household incomes below 200% of the federal poverty level) and $5,700 for families; or $6,800 for self-only and $13,600 for family coverage (for individuals with incomes between 201-250% of the federal poverty level).

For more information please refer to IRS Notice 2020-32.