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The end of the year is fast approaching, so it is important that your have a full understanding of and rules and regulations that will be required in 2016. The IRS announced the Health Savings Account requirements a few months ago — here is a reminder of the HSA contribution limits, HDHP minimum required deductibles and out-of-pocket maximums for the upcoming year. These rules are set annually by the IRS.
2016 HSA Contribution Limits
Individuals and families have the opportunity to save for current and future health care with a Health Savings Account. For the 2016 calendar year, the HSA contribution limits are:
- $3,350 for individuals (self-only coverage). This has not changed from the limits in 2015.
- $6,750 for family coverage, which is an increase of $100 from 2015.
2016 HDHP Minimum Required Deductibles
To be considered a High Deductible Health Plan, and to qualify for opening an HSA, an HDHP must meet minimum annual deductibles. For the 2016 calendar year, the HDHP minimum required deductibles are:
- $1,300 for individual coverage.
- $2,600 for family coverage.
These minimum required deductibles have not changed from the required amounts in 2015.
2016 HDHP Out-of-Pocket Maximum
Annual out-of-pocket expenses for an HDHP include deductibles, co-payments and other expenses. These expenses do not include premiums. For the 2016 calendar year, out-of-pocket maximums are:
- $6,550 for individual coverage, which is an increase of $100 from 2015.
- $13,100 for family coverage, which is an increase of $200 from 2015.
If an HSA is used to pay for nonqualified medical expenses, a tax penalty of 20% of the HSA distribution is applied.
Feeling overwhelmed? Connect with an Employee Benefits Specialist to make sure you are compliant with all Health Savings Account Rules and Requirements for 2016.