The Internal Revenue Service (IRS) announced the annual inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2023 in Revenue Procedure 2022-24. The new limits represent a higher percentage increase than in recent previous years.
An HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses. To be eligible for an HSA, an employee:
- Must be covered by a qualified high deductible health plan (HDHP);
- Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
- Must not be enrolled in Medicare; and
- May not be claimed as a dependent on someone else’s tax return.