By Jason Bramwell
The annual limitation on deductions for individuals with health savings accounts (HSA) will increase in 2014, according to the IRS.
For calendar year 2014, the annual limitation on deductions under §223(b)(2)(A) of the Internal Revenue Code for an individual with self-only coverage under a high-deductible health plan is $3,300, up from $3,250 in 2013.
The annual limitation on deductions under §223(b)(2)(B) for an individual with family coverage under a high-deductible health plan will increase from $6,450 in 2013 to $6,550 in 2014.
According to the IRS, high-deductible health plans in 2014 will have an annual deductible that is "not less than $1,250 for self-coverage or $2,500 for family coverage." Annual out-of-pocket expenses – such as deductibles, copayments, and other amounts that do not include premiums – will not exceed $6,350 for self-only coverage ($100 more than in 2013), or $12,700 for family coverage ($200 more than in 2013).
The IRS defines an HSA as a "tax-exempt trust or custodial account that you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur."