The IRS has released the 2016 inflation adjusted amounts for health savings accounts (HSAs). 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.
High Deductible Health Plan Coverage
An HDHP has a higher annual deductible than typical health plans and a maximum limit on the sum of the annual deductible and other out-of-pocket expenses. For 2016, the minimum annual deductible is $1,300 for self-only coverage or $2,600 for family coverage. Annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) may not exceed $6,550 for self-only coverage or $13,100 for family coverage.
Annual HSA Contribution Limitation
An eligible employee, his or her employer, or both may contribute to the employee’s HSA. For calendar year 2016, the annual limitation on HSA deductions for an individual with self-only HDHP coverage is $3,350. For an individual with family coverage under an HDHP, the annual limitation on HSA deductions is $6,750. The limit is increased by $1,000 for eligible individuals age 55 or older at the end of the tax year.