Starting January 2025, you can contribute more money to your health savings account (HSA).
The IRS has also announced some changes to high deductible health plans (HDHPs) that also become effective as of the first of the New Year.
Here’s what you need to know:
HSA Contribution Limits
The annual contribution limit for individuals with self-only coverage is increasing modestly, from $4,150 in 2024 to $4,300 in 2025.
The annual contribution limit for those with family coverage will see a similar increase, moving from $8,300 in 2024 to $8,550 in 2025.
Additionally, employees aged 55 and above can still contribute an extra $1,000/month in “catch-up” contributions 2025.
This adjustment follows a substantial boost in 2024, during which the limit for individuals jumped significantly from $3,850 in 2023 to $4,150.
Learn More: How to Combine an HSA and a Health Sharing Plan
HDHP Limits
HDHPs, which typically feature lower premiums coupled with higher deductibles, will also see adjustments to their limits in 2025.
The minimum annual deductible for self-only coverage will be $1,650, while the deductible for family coverage will be $3,300.
The maximum annual out-of-pocket expenses for self-only coverage will be capped at $8,300; for the family, the limit will be double that amount, reaching $16,600.
You can read the IRS’s full announcement here.
Advantages of HSAs and HDHPs
The combination of HSAs and HDHPs presents a compelling option for individuals seeking to optimize their healthcare savings.
Individuals can effectively lower their taxable income by contributing pre-tax dollars to an HSA. Additionally, the tax-free nature of HSA withdrawals for qualified medical expenses, including deductibles, copayments, and coinsurance, further enhances the financial benefits.
Eligibility
To be eligible to contribute to an HSA, you must meet specific criteria:
- You must be enrolled in a qualifying HDHP, or in the HSA MEC plan.
- You must not be enrolled in Medicare, Medicaid, Veterans Benefits, or any other first-dollar medical insurance;
- You must not be eligible to be claimed as a dependent on someone else’s tax return.
NEW! Combine Health Sharing and Health Savings Account Contributions
Until recently, it was virtually impossible to combine the powerful tax benefits of HSA contributions with the tremendous cost savings of opting for a non-insurance health sharing plan instead of a traditional high deductible health insurance plan.
But now, that’s changed!
If you are a business owner, independent contractor, or self-employed, we now have a way you can experience the best of both worlds: The HSA MEC plan!
Visit our HSA MEC page for more information.
Compare Pricing on the Best HealthShare Plans Available
Questions?
Your HSA for America Personal Benefits Manager is available to help!
Whether you’re looking to become eligible to make HSA contributions or an employer interested in making HSAs a valuable benefit for your employees and their families, schedule a free consultation with one of our expert PBMs.
It’s easy, free, and there’s no obligation. But we can often save our clients significant amounts.
Disclaimer: This article is intended for informational purposes only and should not be construed as tax or financial advice. It is advisable to consult with qualified professionals for personalized guidance regarding your specific circumstances.
For Further Reading: How To Combine Health Sharing and HSA Contributions | Do I Need Health Insurance if I Join a Direct Primary Care Plan? | The Best Health Insurance for Self Employed & Freelancers (May Not Be Insurance at All)
Wiley is President of HSA for America. He believes that consumers should have choice and price transparency, so they can make the best healthcare decisions for their needs. Read more about Wiley on his Bio page.
