The IRS has issued Revenue Procedure 2020-32 to announce the 2021 contribution limits and high deductible health plan (HDHP) design requirements. The new Health Savings Account (HSA) contribution limits will become effective January 1, 2021, and the new HDHP design requirements will go into effect on the first day of plan years beginning on or after January 1, 2021.
Earlier this year, the US Department of Health and Human Services (HHS) issued the Notice of Benefit and Payment Parameters for 2021 which detailed the inflation adjusted out-of-pocket (OOP) maximums that will apply to non-grandfathered health plans for plan years beginning in 2021. The OOP maximum includes the plan’s deductible, co-pays, coinsurance and other cost-sharing amounts for benefits that are considered essential health benefits under the Affordable Care Act (ACA). The Notice also proposes to allow non-HDHP plans to determine whether or not to count the value of drug manufacturer coupons towards the ACA OOP maximum, which is an expansion on the previous proposal to permit plans to disregard coupon savings only when an appropriate generic equivalent was available.
The following chart shows the various limits for 2020 and 2021. Please note that the HSA contribution limits apply to account holders on a calendar-year basis and are subject to proration based on monthly HSA eligibility. The HDHP and ACA limits shown apply to plan years which begin in the year specified.
If you have questions about the 2021 limits or other compliance concerns, please feel free to contact your Foster & Foster consultant.