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2021 Limits for HSAs and HDHPs Announced by IRS

The annual limit on health savings account (HSAs) contributions for 2021 registered an increase of about 1.5 percent from 2020. The IRS announced the updates on May 21, which leaves ample time for employers who sponsor high-deductible health plans (HDHPs) to prepare for open enrollment season later this year.

The IRS has confirmed in Revenue Procedure 2020-32 the HSA contribution limits effective for calendar year 2021, along with minimum deductible and maximum out-of-pocket expenses for the HDHPs that pair with HSAs.

Adjustments based on inflation

The annual contribution limits adjustments for inflation (rounded to the nearest $50) are based on the Consumer Price Index for All Urban Consumers for the 12-month period ending on March 31.

The catch-up contribution amount, however, is fixed by statute.

1. For HSAs, the limits for contributions for 2021 are as follows:

HSA contribution
(Employer + employee)

  • Self-only coverage: $3,600 (up by $50 from $3,550 for 2020)
  • Family coverage: $7,200 (up by $100 from $7,100 for 2020)

HSA catch-up contributions
(Age 55 or older)

Additional $1,000 allowed (No change)

2. For HDHPs, the limits are as follows:

Annual deductibles

  • Self-only coverage: No less than $1,400 (No change)
  • Family coverage: No less than $2,800 (No change)

Annual out-of-pocket expenses
(Including deductibles, co-payments, and co insurance but not premiums)

  • Self-only coverage: $7,000 (up from $6,900 in 2020)
  • Family coverage: $14,000 (up from $13,800 in 2020)

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.