The Internal Revenue Service issued its annual inflation-adjusted amounts Friday for health savings accounts next year as the inflation rate surged to the highest level in decades.
In Revenue Procedure 2022-24, the IRS said for calendar year 2023, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,850. That’s up a whopping $200 from $3,650 in 2022 (see story). Last year, the amount only climbed $50 from $3,600 in 2021.
For 2023, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,750. That’s up a big $450 from $7,300 in 2022 and $7,200 in 2021.
For calendar year 2023, a “high deductible health plan” is defined by the IRS as a health plan with an annual deductible no less than $1,500 for self-only coverage or $3,000 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) don’t exceed $7,500 for self-only coverage or $15,000 for family coverage. (That’s up from $1,400 in 2022 for self-only coverage and $2,800 for family coverage, and out-of-pocket expense limits of $7,050 for self-only coverage or $14,100 for family coverage in 2022.)
The higher inflation adjustments are in keeping with surging inflation numbers. The Consumer Price Index climbed 8.5% in March compared to a year ago, the Labor Department reported earlier this month, the biggest increase since December 1981. The personal consumption expenditures price index rose to 6.6% in March, the Commerce Department’s Bureau of Economic Analysis reported Friday, up from 6.4% in February, the steepest rise since 1981.