The Internal Revenue Service (IRS) has responded to rising inflation by raising the contribution limits for health savings accounts (HSA). An HSA is a savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. Starting in 2024, individuals can allocate more funds towards their HSAs, offering a powerful way to save for medical expenses.
What To Expect In 2024
In 2024, the annual HSA contribution limit for self-only coverage will surge to $4,150, representing a remarkable seven percent increase from 2023. This means you can set aside even more money on a pre-tax basis, significantly boosting your health care savings potential. But that’s not all; for those with family coverage, the HSA contribution limit is increasing to $8,300 in 2024, a substantial rise from the previous limit of $7,750. This adjustment allows families to allocate more funds towards their health care expenses, ensuring comprehensive coverage and financial peace of mind. Additionally, individuals aged 55 and older can take advantage of being able to contribute an extra $1,000 to their HSAs.
High-deductible health plans (HDHPs) are also subject to updates in 2024, ensuring a balance between affordability and comprehensive coverage. An HDHP is a plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share (your deductible). In 2024, HDHPs must have a minimum deductible of $1,600 for self-only coverage and $3,200 for family coverage. The annual out-of-pocket expense maximum cannot exceed $8,050 for self-only coverage in 2024 or $16,100 for family coverage, representing significant increases.
What Employers Should Know
Apart from individual benefits, the IRS has introduced updates that benefit employers as well. The IRS announced that in 2024, it will also raise the maximum amount employers may contribute to an excepted-benefit health reimbursement arrangement (HRA) to $2,100. An HRA is an account an employer can set up to reimburse employees for out-of-pocket health care expenses. This means you can provide your employees with even more financial support for their out-of-pocket health care costs. Show your team you care by offering enhanced benefits that truly make a difference.
Boost Your Benefits For Your Team
As we recognize the IRS’s boosts to HSA and HDHP limits in 2024, it’s important to remember that navigating these changes can be complex. As a business owner that has made it through unprecedented times, such as the COVID-19 pandemic and the intense labor market, you understand how important it is to stay ahead of the curve. This is where a professional employer organization (PEO) like GMS enters the picture to become a small business owner’s best friend.
When you partner with GMS, you gain access to our comprehensive group health coverage plan that ensures compliance with the latest regulations and provides cost-effective solutions tailored to your unique needs. GMS represents more than 45,000 employees, which allows us to help small businesses purchase group health insurance for an average of a 24% lower cost for employee premiums and 21% lower for family premiums than the U.S. average.
Allow us to guide you through these transformative times, empowering you to focus on what you do best – growing your business while securing the well-being of your employees. With GMS by your side, you can confidently embrace the future of health care and thrive in an ever-changing business landscape. Interested in learning more? Contact us today.