The IRS has set the maximum amounts employees can funnel into their health savings accounts and health reimbursement accounts (HRAs) for the 2022 policy year.
The IRS updates these amounts every year to adjust for inflation in addition to minimum deductibles for high-deductible health plans, as well as the out-of-pocket maximums your employees are subject to. HSAs, which help employees save for medical expenses, are only available to employees enrolled in HDHPs.
Here are the new figures for 2022:
HSA annual contribution limit
HDHP minimum annual deductible
HDHP annual out-of-pocket maximum
Excepted benefit HRA
Federal law requires health plan enrollees to use HSAs with HDHPs.
An HSA is a special bank account for your employees' eligible health care costs. They can put money into their HSA through pre-tax payroll deduction, deposits or transfers. As the amount grows over time, they can continue to save it or spend it on eligible expenses.
Employers can also contribute to the accounts, but the annual contribution maximum applies to all contributions in total (from the employee and the employer).
The money in the HSA belongs to the employee and is theirs to keep, even if they switch jobs. The funds roll over from year to year and can earn interest. Some plans also have investment options for the funds.
There are a number of benefits for employees who have HSAs:
Here's how they work: