IRS Announces 2022 HSA and HRA Limits

The IRS has announced the 2022 calendar year dollar limits for health savings account (“HSA”) contributions, the minimum deductible amounts and maximum out-of-pocket expenses for high deductible health plans (“HDHPs”) and the HRA excepted benefit limit. By law, these limits are indexed annually to adjust for inflation. 

Background. HSA contributions may only be made by or for individuals who enroll in HDHPs, among other requirements. The Internal Revenue Code provides the definition, annual deductible minimum and out-of-pocket maximum for HDHPs. 

NOTE: The HDHP out-of-pocket maximum includes in-network deductibles, copayments and coinsurance, but does not include premiums.

Revenue Procedure 2021-25. For 2022, the HSA contribution limit for a self-only HSA is $3,650 (a $50 increase from calendar year 2021) and $7,300 for a family HSA (a $100 increase from calendar year 2021).

To qualify as an HDHP in 2022, a plan must have a minimum annual deductible of at least $1,400 for self-only coverage (no change), and $2,800 for family coverage (no change). The maximum out-of-pocket expenses permitted for an HDHP is $7,050 for self-only coverage (a $50 increase) and $14,100 for family coverage (a $100 increase).

The maximum for excepted benefit HRAs (see the Alert of 6/18/19) remains at $1,800.

Takeaway for Employers. Employers are advised to begin updating payroll and plan administration systems to reflect the 2022 cost-of-living adjustments. In addition, employers should incorporate the 2022 HSA limits into all relevant participant communications, such as open enrollment and communication materials, plan documents and summary plan descriptions.

 Rev. Proc. 2021-25 is available at: https://www.irs.gov/pub/irs-drop/rp-21-25.pdf