August 24, 2007

HSA Limits for 2008

On May 11, 2007, the IRS issued inflation-adjusted limits for HSAs for 2008.

For calendar year 2008, the limit on contributions for an individual with self-only coverage under a high deductible health plan is $2,900. For an individual with family coverage under a high deductible health plan, the limit is $5,800.

A high deductible health plan, for calendar year 2008, is defined as a health plan with an annual deductible of not less than $1,100 for self-only coverage or $2,200 for family coverage (these deductible amounts are unchanged from 2007). The limit on annual out-of-pocket expenses is $5,600 for self-only coverage or $11,200 for family coverage.

The IRS also reiterated the legal change made by the Tax Relief and Health Care Act of 2006, which provided that the maximum HSA contribution amount is the indexed statutory amount, rather than the lesser of that amount or the deductible of the high deductible health plan. This change applies to taxable years beginning after December 31, 2006.