May 9, 2014

IRS Announces HSA Inflation Adjustments for 2015

Under the health care reform law, a non-grandfathered group health plan’s out-of-pocket maximums for its 2015 plan year cannot exceed those permitted that year for the high-deductible health plan (HDHP) coverage that an individual must have to be eligible for tax-favored contributions to an HSA. This requirement does not apply to grandfathered plans. The dollar limits on the out-of-pocket maximum under an HDHP for 2015 are $6,450 for self-only coverage and $12,900 for family coverage. Employers will want to review their plans to ensure compliance with this requirement by the start of their 2015 plan year (January 1, 2015 for a calendar year plan).

By law, the IRS must publish the annual inflation adjustments relating to HSAs no later than June 1 for the following calendar year.

The IRS announces the adjustments for HSAs much earlier in the year than it announces the adjustments for other types of benefits programs. (Inflation adjustments for most plans usually are announced in October or November. A chart of those limits appears in the Willis Health and Welfare Calendar, available from your Willis representative.) The earlier timing of the announcement for HSAs is mandated by legislation that Congress passed at the end of 2006 (see Willis Employee Benefits Alert, Issue 91, “Health Savings Account Legislation Makes HSAs More Flexible”). The legislation revised the provisions governing HSAs so that the IRS now must publish the annual adjustments no later than June 1 for the following calendar year.