HSA 2022 Limits Released

HSA 2022 Limits Released

HSA 2022 Limits Released

The IRS has released the 2022  Health Savings Account (HSA) inflation adjustments. To be eligible to make HSA contributions, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.

New HSA 2022 limits are as follows:

 

2022

2021

HSA Annual Contribution Limit
$3,650;  $7,300
$3,600 – Single; $7,200 – Family
HDHP Minimum Annual Deductible
$1,400;  $2,800
$1,400 – Single; $2,800 – Family
HDHP Out-of-Pocket Maximum
$7,050;  $14,100
$7,000 – Single; $14,000 – Family
Age 55+ Catch-Up Provision
$1,000;  $2,000
$1,000- Single; $2,000 – H/W 

Age 55 Catch Up Contribution

As in 401k and IRA contributions, you are allowed to contribute extra if you are above a certain age. If you are age 55 or older by the end of the year, you can contribute an additional $1,000 to your HSA. If you are married, and both of you are age 55, each of you can contribute an additional $1,000. A savvy strategy for high-income earners is to invest the money in your HSA for the long haul. Once you’re 65, you can take out tax-free distributions to cover Medicare premiums. If you withdraw money at that point for non-medical uses, you pay the same tax as you would on withdrawals from a pretax 401(k). But you can also take money out tax-free to reimburse yourself for prior years’ out-of-pocket medical expenses if you have the old receipts.


COVId-19 Update: 

You can even use an HSA to save on a typical trip to the CVS. Thanks to a tax relief provision tucked in the last Covid-19 stimulus package, you can use the money you stash in an HSA or FSA (more on those later) for over-the-counter medications like Tylenol or Flonase as well as menstrual products like tampons and pads. That reverses Obamacare restrictions on OTC meds requiring a doctor’s prescription for them to be eligible for reimbursement.

 

HSA/HDHP Market Growth

HSA holders own the assets in the accounts and can build up substantial sums over time.  Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.

FSA Store

HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.

  • The number of people with HSA/HDHP coverage rose to more than 11.4 in January 2011, up from 10.0 million in January 2010, 8.0 million in January 2009, and 6.1 million in January 2008.
  • 30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
  •  14% of all workers in the private sector have access to a Health Savings Account acc. to the Bureau of Labor Statistics.
  • States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois, and Minnesota.

HSA Advantages:

  • Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
  • Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
  • Tax-Free Money allowed for non-traditional Medical coverage– As per IRS Publication 502, unused money can be used for dental, vision, Lasik eye surgery, acupuncture, yoga, infertility, etc.  Popular Examples
  • Portability – The funds belong to you, so you keep the funds if you change jobs or retire.

Our overall experience with HSAs has been positive when employer funding is at a minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money).  Traditional plans trend of higher copays and new in-network deductibles has also led to the popularity of an HSA.

Next Steps

Plan sponsors should update payroll and plan administration systems for the 2022 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, such as open enrollment and communication materials, plan documents, and summary plan descriptions.

RESOURCE:

Is your HSA compliant?  Which pre-tax qualified HSAFSAHRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.  Stay tuned for updates as more information gets released.  Sign up for the latest news updates.

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PPE Expenses May Be Reimbursable Under HSA

PPE Expenses May Be Reimbursable Under HSA

PPE Expenses May Be Reimbursable Under Health Spending Accounts – Video

During the COVID-19 pandemic, you may have purchased masks or PPE for the purpose of preventing the spread of the COVID-19. Now, according to a recent announcement from the IRS, those purchases may be deductible from your income for tax purposes and eligible to be paid or reimbursed under certain savings accounts. This video explains further:

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The information provided on this website is intended for informational purposes only.  Millennium Medical Solutions Corp. does not offer legal or medical guidance.  Those with legal or medical questions should seek appropriate assistance from a licensed professional.  Stay up to date by signing up for Newsletter and Coronavirus Dashboard below.

Learn how our PEO Partnership can help your group please contact us at info@360peo.com or (855)667-4621.

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2021 Dollar Limits

2021 Dollar Limits

The IRS & SSA announced the 2021 dollar limits for various benefits and compensation levels for retirement plans and IRAs. There are incremental changes but nonetheless worth bookmarking.

 

The contributions and retirement benefits for qualified retirement plans and individuals. Retirement Arrangements (IRAs) are subject to certain limits that are adjusted by the Secretary of the Treasury annually subject to cost-of-living. Highlighted below are the various 2020 and 2021 limits that impact IRA and retirement plans.

 

Compensation Limits

 

 

 

2020

2021

Compensation Limit

285,000$$290,000

Defined Benefit §415 Limit

$230,000

$230,000

Defined Contribution §415 Limit

$57,000$57,000

Key Employee Officer

$185,000$185,000

Highly Compensated Employee

$130,000$130,000

Governmental. Plan Compensation

Limit

$425,000$435,000

ESOP §409(o) Limits

$1,150,000

$230,000

$1,165,000

$230,000

 

 

 

Deferral and Catch-up Contribution Limits

 

 

2020

2021

401(k), 403(b), 457(b) Nan Deferral. Limi

$19,500$19,500

401(k), 403(b), Governmental. 457(b) Catch-up Limi

$6,500

$6,500

SIMPLE Plan Deferral Limi

$13,500$13,500

Key Employee Officer

$185,000$185,000

SIMPLE Plan Catch-up Limit

$3,000$3,000

 


IRA Limits

 

The limit on contributions to a traditional. or Roth IRA will remain unchanged in 2021 at $6,000. The limit that applies to IRA catch-up contributions (contributions for individuals age 50 and older) remains at $1,000.

 

Social Security

 

The Social. Security Administration (SSA) announced an increase in the taxable wage base (TWB) for 2021 to $142,800 (was $137,700 in 2020). Workers pay Social. Security tax on wages up to the TWB and some retirement plans use the TWB when allocating contributions or calculating benefits.

 

HSA Contribution Limits

 

Although not a formal. retirement plan, health savings accounts (HSA) often factor into retirement savings. The IRS announced the following 2021 limits. These apply to individuals under a high-deductible-health-plan (HDHP). The minimum deductibles and maximum out-of-pocket expenses the IRS uses to define HDHPs are outlined below, as well.

 

HSA Contribution Limits

 

LimitIndividualFamily

 

 

2020

2021

2020

2021

HSA Contribution Limits

$19,500$19,500$7,100$7,200

Minimum Deductible for HDHPs

$6,500

$6,500

$2,800

$2,800

Maximum Out-of-Pocket Expense

$6,500$6,500$2,800$2,800

 

Resource:

 

 

 

 

Is your HSA compliant?  Which pre-tax qualified HSAFSAHRA spending card is right for you? Please contact our team at 360PEO (855)667-4621 for immediate answers.  Stay tuned for updates as more information gets released.  Sign up for the latest news updates.

 

The subject matter in this communication is educational only and not rendering legal, accounting, investment advice, or tax advice. You should consult with appropriate counsel or other professionals on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.

 

 

 

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HSA 2022 Limits Released

HSA 2021 Limits

The IRS has released the 2021  Health Savings Account (HSA) inflation adjustments. To be eligible to make HSA contributions, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.

New HSA 2021 limits are as follows:

 

2021

2020

HSA Annual Contribution Limit
$3,600;  $7,200
$3,550 – Single; $7,100 – Family
HDHP Minimum Annual Deductible
$1,400;  $2,800
$1,400 – Single; $2,800 – Family
HDHP Out-of-Pocket Maximum
$7,000;  $14,000
$6,900 – Single; $13,800 – Family
Age 55+ Catch-Up Provision
$1,000;  $2,000
$1,000- Single; $2,000 – Husband/Wife

Age 55 Catch Up Contribution

As in 401k and IRA contributions, you are allowed to contribute extra if you are above a certain age. If you are age 55 or older by the end of the year, you can contribute an additional $1,000 to your HSA. If you are married, and both of you are age 55, each of you can contribute an additional $1,000. A savvy strategy for high-income earners is to invest the money in your HSA for the long haul. Once you’re 65, you can take out tax-free distributions to cover Medicare premiums. If you withdraw money at that point for non-medical uses, you pay the same tax as you would on withdrawals from a pretax 401(k). But you can also take money out tax-free to reimburse yourself for prior years’ out-of-pocket medical expenses if you have the old receipts.


COVId-19 Update: 

You can even use an HSA to save on a typical trip to the CVS. Thanks to a tax relief provision tucked in the last Covid-19 stimulus package, you can use the money you stash in an HSA or FSA (more on those later) for over-the-counter medications like Tylenol or Flonase as well as menstrual products like tampons and pads. That reverses Obamacare restrictions on OTC meds requiring a doctor’s prescription for them to be eligible for reimbursement.

 

HSA/HDHP Market Growth

HSA holders own the assets in the accounts and can build up substantial sums over time.  Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.

FSA Store

HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.

  • The number of people with HSA/HDHP coverage rose to more than 11.4 in January 2011, up from 10.0 million in January 2010, 8.0 million in January 2009, and 6.1 million in January 2008.
  • 30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
  •  14% of all workers in the private sector have access to a Health Savings Account acc. to the Bureau of Labor Statistics.
  • States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois, and Minnesota.

HSA Advantages:

  • Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
  • Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
  • Tax-Free Money allowed for non-traditional Medical coverage– As per IRS Publication 502, unused money can be used for dental, vision, Lasik eye surgery, acupuncture, yoga, infertility, etc.  Popular Examples
  • Portability – The funds belong to you, so you keep the funds if you change jobs or retire.

Our overall experience with HSAs has been positive when employer funding is at a minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money).  Traditional plans trend of higher copays and new in-network deductibles has also led to the popularity of an HSA.

Next Steps

Plan sponsors should update payroll and plan administration systems for the 2021 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, such as open enrollment and communication materials, plan documents, and summary plan descriptions.

RESOURCE:

Is your HSA compliant?  Which pre-tax qualified HSAFSAHRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.  Stay tuned for updates as more information gets released.  Sign up for the latest news updates.

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