Industry News

On May 10, 2021, the Internal Revenue Service (IRS) issued Revenue Procedure 2021-25: 2022 Inflation-Adjusted Amounts for HSAs, High-Deductible Health Plans, and Excepted Benefit Health Reimbursement Arrangements. The IRS announced cost-of-living adjustments to the applicable dollar limits for Health Savings Accounts (HSAs), High Deductible Health Plans (HDHPs) and the maximum amount that may be made newly available for certain Health Reimbursement Arrangements (HRAs) for 2022.

For calendar year 2022, the annual limitation on deductions under IRC § 223(b)(2)(A) for an individual with self-only coverage under a HDHP is $3,650. For calendar year 2022, the annual limitation on deductions under IRC § 223(b)(2)(B) for an individual with family coverage under a HDHP is $7,300. IRC § 223(b)(3) also allows an additional $1,000 annual HSA catch-up contribution for individuals age 55 or older before the end of the tax year.

For calendar year 2022, the IRS defines a HDHP under IRC § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage.

For plan years beginning in 2022, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA (under Regs. Sec. 54.9831-1(c)(3)(viii)) remains unchanged at $1,800. Employers use excepted benefit HRAs to help cover the cost of employees’ vision, dental, or short-term, limited-duration insurance plan premiums.

Rev. Proc. 2021-25 is available here.