Open enrollment for federal employee benefits is just around the corner, and there’s good news for those seeking to maximize the benefit of health savings plans.
Beginning in 2024, the Internal Revenue Service announced its raising the contribution ceiling for individuals close to 8% above last year‘s record high. Before that, increases hovered around 2%.
The IRS adjusts annual HSA contribution caps based on changes in the cost of living, which has increased amid high inflation in the last two years.
The increase for 2024 will allow civil servants covered by the Federal Employee Health Benefits plan to set aside more money on a pre-tax basis for certain medical expenses under a high-deductible health care plan.
Here’s how it breaks down per plan:
- For self-only enrollments, the limit is raised increases to $4,150 from $3,850.
- For those with self-plus-one or family coverage, the contribution limit increases to $8,300 from $7,750.
- Participants 55 and older can continue to contribute an extra $1,000 to their HSAs.
For high-deductible health plan, an enrollee must have a deductible of at least $1,600 for self-only coverage up from $1,500 in 2023, or $3,200 for family coverage, up from $3,000.
“High-deductible health plans may save you money if you are generally healthy, without dependent children and can fully fund your health savings account,” said the National Treasury Employees Union in a blog post. “A higher deductible means you are responsible for a greater amount of your initial health care costs, but you pay lower monthly premiums.”
Annual out-of-pocket expense maximums, which include deductibles, co-payments but not premiums, are capped at $8,050 for self-only coverage in 2024 and $16,100 for family coverage, according to the Society for Human Resource Management.
Open season is slated for November 13th to December 11th, 2023.