As inflation continues, the IRS has announced increased well being financial savings account (HSA) contribution limits for 2025. The boosted limits give workers extra room to avoid wasting and make investments cash for medical bills tax-free.
2025 HSA Limits Soar Because of Inflation
For 2025, the HSA contribution restrict for particular person protection will improve by 3.6% to $4,300, up from $4,150 in 2024. The household protection contribution restrict will go up 3% to $8,550 subsequent yr, a rise from $8,300.
Whereas it’s welcome information for savers, the 2025 hike is notably smaller than this yr’s almost 7% inflation-fueled increase. Contribution limits have elevated steadily in recent times as costs and wages develop.
HSA participation continues to develop throughout employer-sponsored well being plans. Trade analysis reveals account balances reached a file $123.3 billion in 2023, up 19% from the prior yr. Specialists say rising limits point out sturdy and increasing curiosity in HSAs as a technique to save for healthcare.
Excessive-Deductible Well being Plan Thresholds Additionally Climb
To be HSA-eligible, a person should have a high-deductible well being plan (HDHP) with minimal deductible and out-of-pocket most quantities. The IRS elevated these thresholds for 2025 as properly.
The minimal HDHP deductible will improve to $1,650 for particular person protection, up $50 from 2024 ranges. For household plans, it’s going to rise by $100 to $3,300 subsequent yr.
Moreover, out-of-pocket maximums will attain $8,300 for employee-only protection and $16,600 for households in 2025. These signify respective $250 and $500 hikes. An exception applies to preventive care in HDHPs, which stays absolutely lined by insurance coverage with no price sharing.
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