Discover All There Is To Know About the New 2024 HSA Contribution Limits
Health savings accounts (HSA) are an appealing health insurance benefit. While there are limits on how much can be contributed toward a health savings account, these limits are increasing in 2024.
Learn all you should know about the new limits for 2024, what individual and group health plan members can expect, and how to discuss these changes with your clients.
Changes for HSA Contribution Limits in 2024 and What They Mean
Health savings accounts are member-owned accounts used to save pre-tax dollars. These saved funds can be used to cover future qualified costs, such as emergency, dental, vision, and family health needs. Both employers and employees can make tax-free contributions to this savings account. With an HSA, you can also invest in mutual funds — tax-free — plus, the funds never expire. HSAs can only be used in conjunction with a high-deductible health plan (HDHP).
Each year, the contribution limits change, and 2024 is no exception. The new limits are:
- $4,150 maximum for HSA contributions (a $300 increase from 2023)
- $1,600 deductible minimum for qualifying high deductible health plans (HDHPs) (a $100 increase from 2023)
- $8,050 maximum out-of-pocket HDHP expenses for things like copays, deductibles, and more (a $550 increase from 2023)
- $8,300 for families (a $550 increase from 2023)
- $3,200 deductible minimum for qualifying HDHPs (a $200 increase from 2023)
- $16,100 maximum out-of-pocket HDHP expenses for things like copays, deductibles, and more (a $1,100 increase from 2023)
Additionally, it’s good to know that:
- If you are 55 and older, you can submit a catch-up contribution of up to $1,000 every year. This limit is unchanged from 2023.
- Contribution limits are prorated by the number of months you are eligible to contribute to your HSA. To calculate your prorated limit, take the number of months you were enrolled on the first of the month and divide it by 12. Then, multiply that number by your HSA maximum (the number you could contribute if you were eligible for the whole year). Say, for example, you are an individual who is enrolled for only nine months out of the year. Divide nine by 12, which is 0.75. Then, multiply 0.75 by $4,150 (your maximum contribution for the entire year), which equates to $3,112.50. That is your new maximum contribution limit.
As you can see, there have been significant increases throughout the limits for 2024 — and the new limits are at a record high. These changes are being implemented due to the impacts of inflation over the past year. Having a higher HSA limit enables both plan members and employers to save more money to put toward future medical costs.
How to Communicate About the 2024 HSA Contribution Limit Changes
It’s crucial to communicate impactful changes for group and individual health plans to your prospects, clients, and agents. Whether it’s sending a mass email to all affected parties or calling a list of contacts, the important thing is to get the message out.
This is where technology can help.
Using an industry-specific management platform, like AgencyBloc’s AMS+ solution, your team can identify the affected prospects and clients and quickly create a call list or send a mass email.
Storing all of your data in one location allows your team to see how many HSA products your company has sold, as well as the policyholders who own those HSAs. With this information at your fingertips, your client services and sales teams can take the appropriate action to contact and inform prospects and clients about the changes.
These steps help build the confidence prospects and clients have in your team, which in turn allows your organization to increase your client retention rate and reduce churn.
In addition to communicating the 2024 HSA contribution limit changes, it’s also beneficial to touch on these major bullet points:
- You must be enrolled in an HDHP that has an annual minimum deductible of $1,600 for individuals and $3,200 for families
- Annual out-of-pocket expenses can’t exceed $8,050 for individuals and $16,100 for families
- These funds don’t expire, even if you change jobs
- These funds can be used to cover a range of medical expenses such as dental, emergency medical, vision, first-aid kit supplies, contraceptives, and more
- In some cases, the money contributed to an HSA can be used for investments
Stay Organized and Efficient With the Right Agency Management Platform
As an organization servicing individual and group health insurance plans, it’s critical to stay ahead of industry changes and trends so that you can be a better support to your clients. An industry-specific management platform can help you do this by ensuring you never miss a beat when it comes to client communication, lead and sales management, compliance management, and more.
AgencyBloc is the #1 Recommended Insurance Industry Growth Platform serving the health, benefits, and senior insurance space. Our suite of insurance-specific solutions helps independent insurance agencies, GAs, IMO/FMOs, and call centers remain compliant and accelerate growth. From sales enablement and quoting and proposals tools to customer and policy management, insurance data analysis, and commission management features, we’ve got you covered.
Stay Organized and Effective With AgencyBloc’s Suite of Industry-Specific Solutions
AMS+ is a powerful, industry-specific management platform designed to help your organization accelerate growth and maintain compliance. Schedule a demo to learn how.
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by Allison Babberl
on Wednesday, December 27, 2023
- industry news
- open enrollment