Annual Health Savings Accounts (HSAs) limits are taking a jump for 2024. The IRS has increased the self-only coverage contribution to $4,150 (7.8%) and family coverage contributions have been raised to $8,300 (7.1%). These are the biggest increases in recent years.
The over 55 “bonus” contribution of an extra $1,000 remains unchanged.
As a reminder, an HSA allows you to set aside tax-free dollars to spend on healthcare costs. Unlike a flexible spending account, you don’t have to spend your entire HSA during a plan year. Instead, the funds can rollover from year to year, building a reserve to fund medical expenses. Withdrawals are also tax-free if they’re used for qualified medical expenses.
The 2024 contribution limit increase could prove very beneficial for those who are able to/choose to fully fund their HSA. However, there are many people who don’t or can’t take advantage of fully funding an HSA.
As organizations are communicating these increases to employees, it’s important to use the opportunity to educate both those who use their HSA and those who don’t on how to be knowledgeable healthcare consumers and make their medical dollars go as far as possible.
In a time of rising consumer inflation, it’s doubly critical that consumers are being smart about their healthcare spending, while at the same time taking care of themselves and not avoiding seeking care when they need it for fear of a large bill.
We often partner with our clients to help educate team members on smart healthcare spending covering such topics as:
- Savvy pharma spending - not all pharmacies charge the same.
- Stay away from the ER when a telehealth visit will do.
- Shop around for imaging options. You might be able to find a cheaper MRI at an imaging center.
- Can your procedure be done at an ambulatory surgery center and not the hospital?
As you are preparing benefits packages for 2024, be sure to take the higher HSA limits into account and reach out to McClone if you need support.
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