May 9, 2024 - McDermott Will & Emery
Jacob M. Mattinson, Sarah G. Raaii, Alden J. Bianchi
The Internal Revenue Service (IRS) recently announced (see Revenue Procedure 2024-25) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2025. All of the dollar limits currently in effect for 2024 will change for 2025, with the exception of one limit. The HSA catch-up contribution for individuals ages 55 and older will not change as it is not subject to cost-of-living adjustments.
The table below compares the applicable dollar limits for HSAs, HDHPs and excepted benefit HRAs for 2024 and 2025.
| HEALTH AND WELFARE PLAN LIMITS | 2024 | Δ | 2025 |
|---|---|---|---|
| HDHP ・Maximum annual out-of-pocket limit (excluding premiums) | |||
| Self-only coverage | $8,050 | ↑ | $8,300 |
| Family coverage | $16,100 | ↑ | $16,600 |
| HDHP ・Minimum annual deductible | |||
| Self-only coverage | $1,600 | ↑ | $1,650 |
| Family coverage | $3,200 | ↑ | $3,300 |
| HSA ・Annual contribution limit | |||
| Self-only coverage | $4,150 | ↑ | $4,300 |
| Family coverage | $8,300 | ↑ | $8,550 |
| Catch-up contributions (ages 55 and older) | $1,000 | = | $1,000 |
| Excepted Benefit HRA | |||
| Annual contribution limit | $2,100 | ↑ | $2,150 |
NEXT STEPS
Plan sponsors should update payroll and plan administration systems for the 2025 cost-of-living adjustments and incorporate the new limits in relevant participant communications, such as open enrollment and communication materials, plan documents and summary plan descriptions.
For further information about applying the new HSA, HDHP and excepted benefit HRA plan limits for 2025, please contact your regular McDermott lawyer or one of the authors below.