Blue Cross and Blue Shield of Illinois

 

June 28, 2013

IRS Announces Inflation Adjustments for 2014 HSAs and HDHPs

The Internal Revenue Service recently announced the 2014 inflation adjustments for Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP). These adjustments include maximum HSA contributions, minimum deductible amounts and maximum out-of-pocket limits. The following adjustments apply to calendar year 2014.

Contributions to an HSA
The annual limitation on contributions to an HSA [§223(b)(2)(A)] for an individual with self-only coverage under an HDHP is $3,300. For the calendar year 2014, the annual limitation on contributions to an HSA [§223(b)(2)(B)] for an individual with family coverage under an HDHP is $6,550.

For individuals age 55 and older, the additional catch-up contribution limit to an HSA is $1,000 [9§223(b)(3)(B)]. There is no change from calendar year 2013.

2014 IRS HSA Contributions and Maximums
Annual Contributions

Self-Only

Family

HSA Contributions

$3,300

$6,550

Minimum Deductible Amounts

$1,250*

$2,500*

Annual Out-of-Pocket (in-network)

$6,350

$12,700

“Catch-up” Contributions (individuals age 55 and older)

$1,000*

 

Amounts are adjusted annually for inflation.
* No change from calendar year 2013

High Deductible Health Plans
An HDHP is defined as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage [§223(c)(2)(A)]. There is no change from calendar year 2013. The annual out-of-pocket expenses (OOP) – deductibles, copayments and other amounts, but not premiums – do not exceed $6,350 for self-only coverage or $12,700 for family coverage.

2014 HDHP and HSA Requirements

 

2013

Minimum Individual Deductible

$1,250

Minimum Family Deductible

$2,500

Maximum Individual OOP

$6,250

Maximum Family OOP

$12,500

Maximum Individual Contribution

$3,250

Maximum Family Contribution

$6,450

Minimum Individual Embedded Deductible

$2,500

Minimum Family Embedded Deductible

$2,500

Indicates increase from 2013.

Preparing for 2014
Beginning Jan. 1, 2014, new HSA-compatible HDHP plans will require the minimum deductibles and maximum out-of-pocket expenses that do not exceed $6,350 for self-only coverage or $12,700 for family coverage.

Be sure your health plans are compliant with 2014 regulations. Employer groups with HDHPs that already meet 2014 minimum deductible requirements do not need to make changes. Review the maximum out-of-pocket expense limits to make sure they are compliant.

  • Employer groups that currently have a minimum deductible plan ($1,250 individual or $2,500 family) for their 2014 renewal: the minimum deductible amount is compliant with 2014 IRS guidelines; no change is needed.
  • Employer groups with non-standard products: check to make sure appropriate changes are made to comply with HSA regulations.
     
  • Employer groups that currently offer a minimum embedded deductible ($2,500) as part of a family HDHP for their 2014 renewal: the minimum deductible amount is compliant with 2014 IRS guidelines for individual coverage within the family embedded deductible; no change is needed.
  • If an employer group has an extended renewal period for any reason (i.e., renewing on Oct. 1, 2012, with the next renewal date of Dec. 31, 2013): make sure that during the plan year of 2013, the HSA-compatible HDHP complies with IRS regulations. This applies to groups whose extended renewal does not offer a renewal date in 2014. In these cases, the change should be made effective Jan. 1, 2014.

If you need assistance, contact your broker or account representative.

 

 
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an Independent Licensee of the Blue Cross and Blue Shield Association.