OVERVIEW

On April 29, 2016, the Internal Revenue Service (IRS) released Revenue Procedure 2016-28 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2017. These limits include:
• The maximum HSA contribution limit;
• The minimum deductible amount for HDHPs; and 
• The maximum out-of-pocket expense limit for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under an HDHP.

The minimum deductible and maximum out-of-pocket limits for HDHPs will not change for 2017 plan years. The only limit that will change for 2017 is the HSA contribution limit for individuals with self-only coverage under an HDHP, which will go up by $50.

ACTION STEPS

Because the limits for HDHPs will not change for 2017, employers that sponsor these plans will not need to make plan design changes to comply with the IRS’ rules for HDHP minimum deductibles and maximum out-of-pocket limits.

However, if an employer communicates the HSA contribution limits to individuals as part of the enrollment process, these enrollment materials should be updated to reflect the increased limit that will apply to individuals with self-only HDHP coverage for 2017.

HSA/HDHP Limits

The following chart shows the HSA/HDHP limits for 2017 as compared to 2016. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

HSA Contribution Limit

Self-only in 2016 it is $3,350; in 2017 it is $3,400 (Up $50)

Family in 2016 it is $6,750; in 2017 it is $6,750 (No change)

HSA Catch-up Contributions (not subject to adjustment for inflation)

Age 55 or older in 2016 it is $1,000; in 2017 it is $1,000 (No change)

HDHP Minimum Deductible

Self-only in 2016 it is $1,300; in 2017 it is $1,300 (No change)

Family in 2016 it is $2,600; in 2017 it is $2,600 (No change)

HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums)

Self-only in 2016 it is $6,550; in 2017 it is $6,550 (No change)

Family in 2016 it is $13,100; in 2017 it is $13,100 (No change)

This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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