As you know, the IRS periodically reviews contribution limits and other parameters regarding tax-advantaged accounts, such as health reimbursement arrangement (HRA) and health savings account (HSA). As the inflation index changes, adjustments can be made to keep the accounts relevant and useful for owners. The IRS has recently released their planned changes to the HRA and HSA programs. Here’s what you should anticipate for 2022.
HSA contribution limits will increase a bit next year, allowing savers to set aside more tax-advantaged dollars for their healthcare. The amounts that HSA-compatible, high-deductible healthcare plans can expect enrollees to spend out of pocket will also rise. However, the minimum deductibles will remain the same.
When paired with a high-deductible healthcare plan, the HSA is designed to give enrollees more responsibility for their own healthcare choices. With healthcare prices rising, so will costs, and therefore so should HSA contributions in order to keep pace with potential 0ut-of-pocket expenses.
HRAs are designed to assist employers in contributing toward employee healthcare expenses, while allowing for greater choice and flexibility for individuals. The excepted-benefit HRA funds can be used to pay for COBRA coverage, or dental insurance, vision insurance, disability insurance, or critical illness insurance. In 2022, HRA contribution limits will not increase, remaining at $1,800 for the year.
If you need assistance in understanding how these issues can impact either individuals or employers, call us for more details. We can help you understand how your benefits work, and learn how to take maximum advantage of tax-advantaged contributions each year.