This is the Medical category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.
IRS Releases 2021 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
In Rev. Proc. 2020-32, the IRS released the inflation adjusted amounts for 2020 relevant to HSAs and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.
2021 | 2020 | Change | |
Annual HSA Contribution Limit
(employer and employee) |
Self-only: $3,600 Family: $7,200 | Self-only: $3,550 Family: $7,100 | Self-only: +$50 Family: +$100 |
HSA catch-up contributions
(age 55 or older) |
$1,000 | $1,000 | No change |
Minimum Annual HDHP Deductible | Self-only: $1,400 Family: $2,800 | Self-only: $1,400 Family: $2,800 | No change |
Maximum Out-of-Pocket for HDHP
(deductibles, co-payment & other amounts except premiums) |
Self-only: $7,000 Family: $14,000 | Self-only: $6,900 Family: $13,800 | Self-only: +$100 Family: +$200 |
Out-of-Pocket Limits Applicable to Non-Grandfathered Plans
The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2021.
2021 | 2020 | Change | |
ACA Maximum Out-of-Pocket | Self-only: $8,550
Family: $17,100 |
Self-only: $8,150
Family: $16,300 |
Self-only: +$400
Family: +$800 |
Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage, if the family out-of-pocket limit is above $8,550 (2021 plan years) or $8,150 (2020 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). A one-year extension of transition relief was announced on January 31, extending the transition relief to policy years beginning on or before October 1, 2021, provided that all policies end by December 31, 2022. (This transition relief has been extended each year since the initial announcement on November 14, 2013.)
Next Steps for Employers
As employers prepare for the 2021 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:
- HDHPs cannot have an embedded family …