A health savings account (HSA) is a tax-advantaged savings account an individual or family establishes to pay for qualified medical expenses. HSAs must pair with a qualified high-deductible health plan (HDHP) and they have an annual contribution limit. The IRS adjusts both the guidelines for HDHPs and the contribution limit every year.
In this post, we’ll outline the HSA contribution limits and HDHP guidelines for 2019.
HSA contribution limits for 2019
The IRS released the 2019 HSA guidelines through Revenue Procedure 2018-30 on May 10, 2018.
For tax years beginning in 2019, the following annual limits apply to HSA contributions.
|HSA contribution limit
(company + employee)
|HSA catch-up contributions
These contribution limits are determined on a calendar basis, which means contribution limits are prorated by the number of months individuals are eligible to contribute to an HSA. For example, individuals with self-only coverage who are HSA eligible for six months during the 2019 tax year can contribute up to $1,750.
As long as individuals are eligible to contribute to an HSA, they can make contributions at any point during the 2019 tax year, including up through the individual’s federal tax return due date.
HDHP guidelines for 2019
To open or contribute to an HSA, individuals must have coverage under an HSA-eligible HDHP. HDHP qualification guidelines change every year according to deductible and maximum out-of-pocket limits.
According to IRS guidelines, health policies must reflect the following features to qualify as an HDHP in 2019.
|HDHP minimum deductible||$1,350||$2,700|
|HDHP maximum out-of-pocket amount||$6,750||$13,500|
It’s important to remember that not all HDHPs are HSA eligible. Besides meeting these deductible and out-of-pocket requirements, a policy must not offer any benefit beyond preventive care before meeting the annual deductible.
How the new limits and guidelines compare with 2018 limits
2019 HSA contribution limits rose by $50 for individuals with self-only coverage and by $100 for individuals with family coverage, compared with 2018 limits. This is largely in line with the previous year’s increase of $50 and $150 for self-only and family coverage, respectively.
Minimum deductibles on HDHPs remained the same as in 2018, while maximum out-of-pocket amounts rose by $100 for individuals with self-only coverage and by $200 for those with family coverage. The rate of change for maximum out-of-pocket amounts was the same as it was the previous year.
Here’s a chart to compare HSA contribution limits and HDHP guidelines for 2018 and 2019.
|HSA contribution limit||Self-only: $3,500
|HSA catch-up contributions||$1,000||$1,000||No change|
|HDHP minimum deductibles||Self-only: $1,350
|HDHP maximum out-of-pocket amounts||Self-only: $6,750
*The IRS originally set the HSA contribution limit for 2018 at $6,900, only to revise it to $6,850. Later, it provided relief that effectively restored the original limit.
HSAs are just one form of personalized health benefits
HSAs are an increasingly popular savings tool, and small business contributions toward their employees’ HSAs are a valuable benefit.
HSAs are even more valuable as part of a personalized benefits program. With personalized benefits, small businesses give employees tax-free money to spend on the consumer services they want most.
With personalized health benefits, this could include an individual health insurance policy, copays, deductibles, and prescription and nonprescription drugs.
Here are additional resources to learn more about HSAs and how they can work inside a comprehensive personalized health benefits program.