Author: Rena Pirsos, XpertHR Legal Editor

The Internal Revenue Service (IRS) has released the calendar year 2014 inflation-adjusted amounts for health savings accounts (HSAs) as determined under § 223 of the Internal Revenue Code (IRC). +Rev. Proc. 2013-25, May 2, 2013. HSAs are tax exempt accounts used by employees to pay for medical expenses for themselves, their spouses and dependents. Employers can offer HSAs to employees who are enrolled in a high deductible health plan (HDHP).

The 2014 annual contribution limitation under +IRC § 223(b)(2)(A) for an individual with self-only coverage under a HDHP is $3,300 ($3,250 in 2013). The annual limitation on contributions under +IRC § 223(b)(2)(B) for an individual with family coverage under a HDHP is $6,550 ($6,450 in 2013).

For 2014 a HDHP is defined under +IRC § 223(c)(2)(A) as a health plan with an annual deductible of at least $1,250 for self-only coverage or $2,500 for family coverage (both amounts are unchanged from 2013), and annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) that do not exceed $6,350 ($6,250 in 2013) for self-only coverage, or $12,700 ($12,500 in 2013) for family coverage.

Additional Resources

Payroll > Taxation of Employee Benefits > Health Savings Accounts

Employee Benefits > Health Care Benefits > Health Savings Accounts

Employee Benefits > Managing Health Care Costs