• Home
  • /
  • Blog
  • /
  • Health Savings Account Numbers for 2023
June 13, 2022

Minute Read


The IRS has released the 2023 health savings account (HSA) contribution limits, as well as the 2023 minimum deductible and maximum out-of-pocket amounts for high-deductible health plans (HDHP).

A health savings account is a tax-advantaged account that’s paired with an HDHP. A health savings account offers several valuable tax benefits:

  • You may be able to make pre-tax contributions via payroll deduction through your employer, reducing your current income tax
  • If you make contributions on your own using after-tax dollars, they’re deductible from your federal income tax (and perhaps from your state income tax) whether you itemize or not
  • Contributions to your health savings account, and any interest or earnings, grow tax deferred
  • Contributions and any earnings you withdraw will be tax-free if used to pay qualified medical expenses

2023 Amounts

Here are the key health savings account numbers for 2022 and 2023:

Annual contribution limit

2022

2023

Increase

Self-only coverage

$3,650

$3,850

$200

Family coverage

$7,300

$7,750

$450

High-deductible health plan: self-only coverage

2022

2023

Increase

Annual deductible: minimum

$1,400

$1,500

$100

Annual out-of-pocket expenses required to be paid (other than for premiums) can’t exceed

$7,050

$7,500

$450

High-deductible health plan: family coverage

2022

2023

Increase

Annual deductible: minimum

$2,800

$3,000

$200

Annual out-of-pocket expenses required to be paid (other than for premiums) can’t exceed

$14,100

$15,000

$900

Catch-up contributions

2022

2023

Increase

Annual catch-up contribution limit for individuals age 55 or older

$1,000

$1,000

$0

What is a health savings account?

A health savings account is a savings vehicle established to set aside funds tax free to pay for health care expenses. HSAs, created as part of the Medicare Prescription Drug and Modernization Act of 2003, expand upon the benefits previously offered by Archer medical savings accounts (Archer MSAs). HSAs allow individuals who have high-deductible health plans (HDHPs) to save money for health-care expenses tax free. HSAs can be established by any qualified individual covered by an HDHP.

Who can establish a health savings account?

Generally, if you are covered under an HDHP, you are eligible to establish an HSA.

You will not be eligible to open an HSA, even if you are covered under an HDHP, if any of the following apply:

  • You are already covered under a non-HDHP, including a comprehensive major medical plan, a plan sponsored by your employer or your spouse’s employer, or a prescription drug plan or rider with a low deductible or no deductible. (Some health plans are exempted from this provision, including dental or vision care insurance, long-term care insurance, disability insurance, and accident insurance.)
  • You can be claimed as a dependent on another person’s income tax return
  • You are entitled to Medicare coverage (i.e., you are age 65 or older), and have enrolled in Medicare

How do you establish a health savings account?

An HSA is a tax-exempt trust or custodial account that can be established through any qualified trustee or custodian, including a bank, an insurance company, or a third-party administrator. In some cases, this may be the same institution offering the HDHP. You can open an HSA on your own or, if available, through your employer. Employers may offer HSAs as part of a cafeteria plan.

What happens to funds remaining in your health savings account?

At the end of the year

One of the advantages of HSAs is that HSAs do not have a “use it or lose it” provision. Funds remaining in your account at the end of the year are not forfeited and can continue to accumulate tax free year after year until withdrawn.

If you change jobs

An HSA is portable. Because the account is yours, you can keep it and continue to make contributions even if you change employers or leave the workforce.

If you divorce

If all or part of your interest is transferred to your spouse as part of a divorce settlement, it will not be considered a taxable transfer, and the transferred interest will continue to be treated as an HSA.

If you retire

Although you can no longer open or make contributions to an HSA once you reach age 65 and are enrolled in Medicare, you can take tax-free distributions from your account to pay for medical expenses. You can withdraw funds from your account for nonmedical purposes without owing a penalty (although the amount you withdraw will be subject to income tax).

If you die

Funds remaining in your HSA upon your death become the property of your designated beneficiary. If the beneficiary is your spouse, he or she becomes the account holder and the account remains an HSA. If the beneficiary is not your spouse, the account ceases to be an HSA as of the day of your death, and the fair market value of the funds are includable in your beneficiary’s gross income.


Estate Planning for Missouri Families

Business Planning for Start-ups and Entrepreneurs

I will listen to you, answer your questions, explain all your options, and help you make the best decision

Click BOOK NOW to schedule your no-charge phone call and get your questions answered

LEGAL & BUSINESS SERVICES

Business Plan | LLC

Do you want to protect your personal assets from creditors of the business?

Do you want to protect the business assets from your personal creditors?

Does your business operate in one or more markets or brands?

Estate Planning

Have you or a loved one moved to Missouri in the last year?

Have there been recent changes to your family situation (kids, divorce, etc.)?

Have you made a recent change in your job/career or retired?

Probate

Has a loved one recently passed?

Is it unclear who should inherit specific assets or property?

Did you pay funeral expenses for a loved one?

Are there unpaid medical expenses or credit cards?

You want a plan to make sure your loved ones are taken care of and your affairs are in order but...

you don’t know what is best for your family,

where to start,

or maybe even the right questions to ask,

and how much it will cost.

Which probably makes you feel confused, overwhelmed and maybe even a little powerless.

I look forward to working with you so that you can stop worrying about leaving your loved ones unprepared for one of the most emotional and stressful times in life.

Subscribe for Email Updates