June 1, 2022 2:32 am

HSAs and EBHRAs in 2023

The IRS announced next year’s contribution limits for health savings accounts (HSAs), as well as requirements for high-deductible health plans (HDHPs) to which HSAs must be linked (Rev. Proc. 2022-24). It also announced the limit for Excepted Benefit Health Reimbursement Arrangements (EBHRAs) for 2023. Both limits reflect a significant jump caused by inflation over 2022 limits that had been set last year at this time.

HSAs. For 2023, the maximum deductible contribution to an HSA is $3,850 ($200 more than in 2022) for self-only coverage, or $7,750 ($450 more than in 2022) for family coverage.  The annual contribution limit is $1,000 higher if you are age 55 by the end of the year but not on Medicare. However, if both spouses meet this age requirement, they must have separate HSAs to each contribute an additional $1,000. Starting with the month you enroll in Medicare, you may not make any further HSA contributions.

You can only contribute to an HSA if you have health coverage through an HDHP. To be an HDHP in 2023, a self-only coverage plan must have a minimum annual deductible of $1,500 (up $100), and an out-of-pocket limit (excluding premiums) of $7,500 (up from $7,050 in 2022). For family coverage, the minimum annual deductible is $3,000 (up from $2,800), and the cap on out-of-pocket costs (excluding premiums) is $15,00 (up from $14,100).

EBHRAs. Employees who work for companies large or small may be able to have an EBHRA to pay for certain items not coverage by health insurance, such as vision care and dental care. Contributions lower the amount of compensation subject to tax. The EBHRA supplements, not supplants, a group health plan. The maximum amount per employee for 2023 is $1,950, up from $1,800 (the limit for 2020 through 2022).

Tax Glossary

Roth IRA

A nondeductible contributory IRA that allows for tax-free accumulation of income. Qualifying distributions are completely tax free.

More terms