IRS Increases Tax-Deductible Limits for Health Savings Accounts

The Internal Revenue Service has increased the tax-deductible annual contribution limitation for health savings accounts.

Revenue Procedure 2012-26 provides the 2013 inflation adjusted deduction limitations for annual contributions made to an HSA under Section 223 of the Tax Code. These deduction limitations are updated annually pursuant to Section 223(g) to reflect the cost-of-living adjustments. 

For calendar year 2013, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $3,250, up from the current level of $3,100 this year.

For calendar year 2013, the annual limitation on deductions under for an individual with family coverage under a high deductible health plan is $6,450. That too represents an increase from the 2012 level of $6,250.

For calendar year 2013, a “high deductible health plan” is defined under Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,250 for self-only coverage or $12,500 for family coverage.

That too represents an increase from 2012, where the minimum deductible is $1,200 for singles and $2,400 for families, and the maximum out-of-pocket is $6,050 for singles and $12,100 for families.