Payroll Briefs

IRS Shares New HSA Limits for 2022

June 16, 2021

The Internal Revenue Service (IRS) recently issued a statement sharing the 2022 maximum contribution levels for health savings accounts (HSAs), out-of-pocket spending limits and deductible minimums for high-deductible health plans (HDHPs) that have to be used in tandem with HSAs. The IRS releases the cost-of-living adjustments annually by June 1 and the updates apply to the following year.

HSA Annual Contribution Levels

The largest HSA contribution an eligible individual with self-only coverage can make in 2022 is $3,650, up $50 from 2021. When it comes to family coverage, the maximum annual contribution is $7,300 in 2022, up $100 from 2021. Individuals 55 and older can make a catch-up contribution of up to $1,000, which is no longer adjusted for inflation. Individuals who become eligible on the first day of the last month in a taxable year are entitled to the total annual contribution (combined with the catch-up contribution if they’re above 55), no matter the number of months they were considered eligible for in that year. If an individual is no longer eligible on that date, both HSA and catch-up contributions are prorated using the number of months in the year the individual was eligible for.

Out-of-Pocket Spending for HSA-Compatible HDHPs

The total annual out-of-pocket amount for self-only HDHP coverage in 2022 is $7,050, up $50 from 2021. The total annual out-of-pocket amount for families is $14,100, up $100 from 2021.

Deductible Minimums for HSA-Compatible HDHPs

The minimum deductible for HDHPs has gone unchanged from 2021 and remains at $1,400 for self-only coverage and $2,800 for family coverage. Fiscal year plans satisfying an HDHP’s requirements on the first day of the first month of said fiscal year can apply the deductible to the entire year.

Benefit Health Reimbursement Arrangements (HRAs)

The total amount an individual may make available for an excepted benefit health reimbursement arrangement (HRA) remains at $1,800, the same as from 2021.

Implementing the Increases

With these new increases to HSA limits, employees will benefit from increased flexibility. However, when it comes to your employees updating their HSA contribution amounts, how streamlined is your benefits process?

Contact us today to learn how to successfully administer and manage these new HSA limits for your workforce with less clicks using our integrated benefits administration and payroll software.