HSA Limits Increase for 2021

stethoscope and moneyInflation-adjusted limits for contributions to health savings accounts and high deductible health plans for the coming year were just announced. According to the announcement, eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSA in 2021, an increase of $50 from 2020. Those with family coverage will be able to contribute $7,200 in 2021 and those who are 55 years of age or older will be able to make an additional “catch-up” contribution of $1,000 to their HSA.

While minimum deductibles for HDHPs will remain the same for 2021 plan years at $1,400 for self-only coverage and $2,800 for family coverage, the maximum limits for out-of-pocket expenses will increase to $7,000 for individual coverage and $14,000 for family coverage.

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Employees Contributing More

moneyThe gradual transition to high deductible health plans is having a significant impact on out-of-pocket costs, according to a study released by the Kaiser Family Foundation/Health Research & Educational Trust. In 2016, for the first time, just over half of all workers (51%) with single coverage faced a deductible of at least $1,000. The study also showed that 29% of workers were in high-deductible plans compared to just 20% two years earlier.

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Employers Still Look to Consumer Directed Plans

To combat cost increases that are expected to top 7% this year, many employers are looking at consumer directed health plans for savings. More than half of employers surveyed recently by the National Business Group on Health are increasing the percentage of plan costs paid by employees while 4 out of 10 have increased their in-network deductibles. When it comes to large employers, 75% are offering High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) this year, compared to just over 60% in 2011. Continue reading