What to know about the 2022 HSA contribution limits

Employers have new limits to keep in mind as they prepare for open enrollment season later this year.

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Health savings account contribution limits for 2022 are increasing $50 for self-only coverage–from $3,600 to $3,650–and $100 for family coverage–from $7,200 to $7,300, the IRS announced last week. That’s a 1.4% increase from this year. Employees 55 and older can still sock away an additional $1,000 a year.

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Meanwhile, minimum annual deductible limits are unchanged from 2021. For 2022, plans will remain with a minimum annual deductible of $1,400 for individual coverage or $2,800 for family coverage. Out-of-pocket maximums, however, increased from $7,000 to $7,050 for individual coverage and from $14,000 to $14,100 for family coverage for 2022.

HSA contribution limits are updated annually to reflect cost-of-living adjustments. Although HSA contributions increased modestly, some insiders were expecting a larger increase due to employees’ financial struggles during the pandemic. “The small increase in HSA contribution limits is expected and necessary because of inflation, but it’s simply not enough for most Americans right now,” says Shobin Uralil, co-founder and COO of HSA company Lively. “Healthcare costs are still on the rise. People have struggled to save this year due to COVID-19 and mass unemployment. We should be giving them more ways to save, and that includes significantly increasing HSA contribution limits.”

Many industry insiders tout health savings accounts as a smart way for employees to save for medical expenses (even in retirement), citing their triple tax benefits. HSA enrollment continues to grow, and more employers also are offering contributions to employees’ accounts. At the end of January, Americans held $82.2 billion in 30 million health savings accounts, according to HSA advisory firm Devenir.

The IRS increases are detailed in IRS Revenue Procedure 2021-25 and take effect in January.

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Kathryn Mayer
Kathryn Mayer is HRE’s former benefits editor and chair of the Health & Benefits Leadership Conference. She has covered benefits for the better part of a decade, and her stories have won multiple awards, including a Jesse H. Neal Award and honors from the American Society of Business Publication Editors and the National Federation of Press Women. She holds bachelor’s and master’s degrees from the University of Denver.