Contribution amounts for health savings accounts are set to increase in 2020.
The IRS announced May 28 the limit for an individual will increase to $3,550, a $50 increase over the 2019 amount. The contribution limit for a family plan will jump to $7,100, a $100 increase.
Those changes are effective Jan. 1, 2020.
Catch-up contributions for those 55 and older is still capped at $1,000. The IRS allows individuals who are approaching retirement age to boost their health savings accounts through catch-up contributions.
Changes also are in store for high deductible health plans.
The minimum deductible for individual high deductible plans will increase to $1,400, up from $1,350 now. The minimum deductible on a family plan moves up to $2,800, up $100 from the 2019 amount.
Additionally, annual out-of-pocket maximums for individuals will climb to $6,900, up from $6,750 in 2019. That amount increases $300 for family plans to $13,800. Co-payments and payments toward deductibles are considered out-of-pocket expenses.
Health savings account contributions are made pretax and are tax deductible. Interest also is accrued tax free.
Syndeo assists employers with the management of their employees’ health savings accounts as it relates to the payroll process, which includes deducting, funding and tracking IRS-imposed contribution limits. Employers can offer a company-sponsored plan, or employees can open an individual health savings account. Employee contributions are payroll deducted with funds being direct deposited into a specified HSA account.
About us: As the Heartland’s leading employer services company, Syndeo partners with local business owners to help them minimize risk, improve efficiency and maximize profitability allowing them the freedom to focus on growth and fulfilling their mission. Syndeo fulfills its mission by taking on all of the HR responsibilities for our clients’ workforce, including employee relations, benefits, risk management and payroll.
~Josh Heck, Marketing Manager, Syndeo