Healthcare Benefits and the Limit Increases for HSAs and HDHPs

In today’s fast-paced world, healthcare benefits play a crucial role in attracting and retaining top talent for small businesses. Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) have become increasingly popular options due to their cost-effectiveness and flexibility. As we look ahead to 2024, it’s essential for small businesses to understand the limit increases in HSAs and HDHPs to make informed decisions for their employee’s healthcare benefits.

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals save for qualified medical expenses. It offers individuals an opportunity to set aside pre-tax dollars from their paychecks, reducing their taxable income while providing them with funds for medical expenses. HSAs are available to individuals who are enrolled in High Deductible Health Plans (HDHPs).

What is a High Deductible Health Plan (HDHP)?

A High Deductible Health Plan (HDHP) is a health insurance plan that requires individuals to pay a higher deductible before the plan begins covering their healthcare expenses. HDHPs typically have lower monthly premiums than traditional health plans, making them an appealing option for cost-conscious individuals and small businesses.

Each year, the IRS adjusts the contribution limits for HSAs and the minimum deductible and maximum out-of-pocket limits for HDHPs. For 2024, the following changes will come into effect:

• Eligible individuals with self-only HDHP coverage will be able to contribute $4,150 to their HSAs for 2024, up from $3,850 for2023.
• Eligible individuals with family HDHP coverage will be able to contribute $8,300 to their HSAs for 2024, up from $7,750 for 2023.
• Individuals age 55 or older may make an additional $1,000 “catch-up” contribution to their HSAs.
• The minimum deductible amount for HDHPs increases to $1,600 for self-only coverage and $3,200 for family coverage for 2024 (up from $1,500 for self-only coverage and $3,000 for family coverage for 2023).
• The HDHP maximum out-of-pocket expense limit increases to $8,050 for self-only coverage and $16,100 for family coverage for 2024 (up from $7,500 for self only coverage and $15,000 for family coverage for 2023).

 It’s essential for small business owners to stay updated on these changes and provide their employees with the necessary education and support to make informed decisions about their healthcare plans. Indigo Partners are dedicated to helping you establish affordable insurance solutions to fit within your budget and supply your business additional healthcare benefits your employees will actually use. Contact Indigo Partners today to get a quote on your health insurance needs at 1-888-463-4463!