By Mary Ellen Schill
May 4, 2015
Each spring (or late winter for those of us lucky enough to be living in Wisconsin), the IRS adjusts the various maximums (and minimums) for health savings accounts for the upcoming calendar year. The tax code (Code Section 223 if you want to play along at home) provides for annual “cost of living” adjustments for some of the HSA limits. Interesting, one limit that isn’t adjusted for cost of living is the catch-up contribution limit, which is set by statute at $1,000.
The limits for 2015 and 2016 can be found here. Note that some limits are unchanged from 2015. How can that be, you are probably asking, don’t increases in the cost of living affect single health plan coverage as much as family coverage? The answer is found in the rules about cost of living adjustments, where the Code provides that adjustments can only be made in $50 increments, and adjustments are rounded to the “nearest multiple of $50.” So, as we revisit our grade school math classes, if the adjustment would otherwise be less than $25.00, then there is no adjustment.
While January 2016 is a long ways away, it doesn’t hurt to start planning now. As they say, the early bird does get the worm!
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