The Internal Revenue Service released inflation-adjusted contribution limits for health savings accounts (HSA) for 2021. For calendar year 2021, the annual limitation on deductions under §223(b)(2)(A) for an individual with coverage under a high deductible health plan is $3,600—up $50 from $3,550 in 2020. Whereas the new limits for an individual with family coverage under a high deductible health plan is $7,200—and increase of $100 from $7,100 for 2020.
For calendar year 2021, the IRS defines a “high deductible health plan” as a health plan with an annual deductible that is not less than $1,400 for individual coverage or $2,800 for family coverage. The annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) must not exceed $7,000 for self-only coverage or $14,000 for family coverage.
Employer HSA contributions aren’t treated as taxable income but do count toward an employee’s annual contribution limit.