A new era of rising inflation is affecting nearly every aspect of employees’ financial lives, and contribution limits for medical and retirement accounts—and other thresholds—are no exception. Several benefit limits set by the IRS—from how much employees can contribute to their 401(k) to how much they can stash away in their health saving accounts in a year—have risen in some of the largest increases in years as a result of soaring cost-of-living.
The IRS announced 2023 changes to health savings accounts in May and recently unveiled annual changes to flexible savings accounts and 401(k)s. All of these figures are significant as HR and benefits leaders plan for 2023 and keep employees updated on important benefits figures and thresholds.
From contribution limits to out-of-pocket amounts, here are 11 figures that employers need to know—all of which come into play in January.
$22,500: 401(k) pretax contribution limits
The employee contribution limit for 401(k), 403(b), most 457 plans, or the Thrift Savings Plan for federal employees is increasing to $22,500 in 2023, up from $20,500 in 2022, according to the IRS.
$7,500: 401(k) catch-up contribution limit
The catch-up contribution limit for employees age 50 and older who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increasing to $7,500 in 2023, up from $6,500 in 2022. That means those participants can contribute up to $30,000, starting in 2023.
$3,850: Annual HSA contribution limit for individuals
For the calendar year 2023, the health savings account contribution limits for an individual with self-only coverage will jump to $3,850—a significant $200 increase from $3,650 for this year. Last year, the amount climbed just $50 from $3,600 for 2021.
$7,750: HSA contribution limit for family coverage
Those with family plans will be able to stash up to $7,750 in their health savings account in 2023—up from $7,300 in 2022.
$1,000: HSA catch-up contributions
Employees 55 and older can contribute an extra $1,000 to their health savings account in 2023. The amount remains unchanged from 2022.
$1,500: HDHP minimum deductible for individuals
For 2023, a high-deductible health plan must have a deductible of at least $1,500 for self-only coverage, up from $1,400 in 2022.
$3,000: HDHP minimum deductible for family
For 2023, the health plan must have a deductible of at least $3,000 for family coverage, up $200 from 2022.
$7,500: HDHP maximum out-of-pocket for individuals
For 2023 individual coverage, out-of-pocket limits will increase significantly to $7,500 from $7,050 in 2022. That includes deductibles, co-payments and other amounts, but not premiums.
$15,000: HDHP maximum out-of-pocket for individuals
Deductibles, copayments and other amounts that do not include premiums will have a maximum limit of $15,000 for family coverage, up from $14,100 in 2022.
$3,050: FSA contribution limit
Employees will be able to contribute up to $3,050 in their flexible spending account in 2023, the agency said. That’s up from $2,850 in 2022.
$610: FSA carryover amount limit
For FSA plans that permit the carryover of unused amounts, the maximum carryover amount is $610—an increase of $40 from 2022, the IRS said.
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