HSA 2017 contribution limits: A quick review

With open enrollment ongoing for firms across the U.S. this fall, let's have a refresher on the contribution limits for health savings accounts (HSAs) for 2017. First, let’s quickly review some basics.

HSAs allow participants in high-deductible health insurance plans to set aside money for qualified health expenses. The money can be invested within the HSA, and any investment returns within the fund are not taxed, per Internal Revenue Service rules. Also, HSA contributions are pre-tax, thus lowering an account holder’s taxable income. Many employers contribute to HSAs for their employees, as The Henry K. Kaiser Family Foundation noted in its summary of its 2016 Employer Health Benefits Survey.

Payments from an HSA for qualified medical expenses are not taxable. IRS Publication 502 details the type of expenses that are covered, which include a wide range of medicines, insurance premiums and other costs.

HSAs are rising in use as deductibles rise for so many health plan participants. To participate in an HSA in calendar year 2017, an individual health plan must have a minimum $1,300 deductible, with a family plan having a minimum $2,600 deductible. The out-of-pocket maximum spend for a high-deductible individual plan in 2017 is $6,550, with the family out-of-pocket limit set at $13,100.

HSA 2017 Contribution Limits

In 2017, an individual under age 55 can put a maximum of $3,400 in an HSA. That’s an increase of $50 over the 2016 limit. For families, the limit remains $6,750, the same as 2016.

Individuals age 55 and up who aren’t yet Medicare recipients can contribute $1,000 more, per IRS guidelines.

Finally, HSA account holders can roll over their account balance from year-to-year. For instance, a 40-year-old individual account holder with $1,500 remaining at the end of 2016 isn’t obligated to spend any or all of the money before January 1, 2017. Once 2017 rolls around, another $3,400 can be added to the account.

For more information on HSAs, or for any other employee benefits matters, contact a Plexus client service team member at 847-307-6100 (Deer Park, Ill.), 312-606-4800 (Chicago – Loop), 972-770-5010 (Dallas) or 405-840-3033 (Oklahoma City). We’re here to help – and we’re happy to help.