When you have a health savings account (HSA) eligible high-deductible health plan (HDHP), it’s never too late to open your HSA. And if you already have an HSA, it’s never too early to revisit your HSA strategy and look ahead to next year.
The IRS recently announced 2022 HSA contribution limits, along with 2022 HSA minimum annual deductible limits and 2022 HSA out-of-pocket maximums. Now is the perfect time to review these new numbers so you’re ahead of the game and can plan ahead for any adjustments you may want to make. Because remember, even though you can change your HSA contributions anytime of year, with an HSA, a fresh year gives you a fresh start to make the most of your HSA tax savings.
Comparison of 2021 HSA Contribution Limits vs. 2022 HSA Contribution Limits
The IRS has added small increases to the 2022 HSA contribution limits to help keep pace with cost-of-living adjustments. For next year, those with individual coverage will see a $50 increase in their 2022 HSA contribution limit over 2021, and those with family coverage will see a $100 increase in their 2022 HSA contribution limit. While the increases aren’t as large as some had hoped, every extra dollar you’re able to contribute to your HSA helps you save more and work toward better overall financial health.
Here’s the year-over-year breakdown for HSA contribution limits:
- 2021 HSA Contribution Limits
- Individual coverage: $3,600
- Family coverage: $7,200
- 2022 HSA Contribution Limits
- Individual coverage: $3,650
- Family coverage: $7,300
And don’t forget to keep in mind two other important factors that apply to HSA contribution limits regardless of year:
- 1. If you’re 55 or older
- a. You’re eligible for an additional $1,000 catch-up contribution on top of either coverage-level HSA contribution limit
- 2. Each HSA contribution limit includes contributions from all sources
- a. If your employer or anyone else makes contributions to your HSA throughout the year, you need to take those contributions into account so you don’t exceed the HSA contribution limit for your specific coverage level and circumstances
HSA Minimum Annual Deductible Limits Remain Unchanged for 2022
The IRS sets minimum annual deductible limits for HDHPs to be HSA-eligible. Unlike the 2022 HSA contribution limits, the 2022 HSA minimum annual deductible limits will see no increase.
2022 HSA minimum annual deductible limits will remain the same as 2021:
- 2022 HSA Minimum Annual Deductible Limits
- $1,400 for individual coverage (same as 2021)
- $2,800 for family coverage (same as 2021)
HSA Out-of-Pocket Maximums Increase Slightly for 2022
The IRS also sets HSA out-of-pocket maximums to allow HDHP/HSA accountholders to know upfront the maximum amount they could be subject to for covered healthcare expenses incurred in a given year.
For next year, 2022 HSA out-of-pocket maximums will increase the same amount as 2022 HSA contribution limits, bumping up $50 for those with individual coverage, and $100 for those with family coverage.
Here’s the year-over-year breakdown for HSA out-of-pocket maximums:
- 2021 HSA Out-of-Pocket Maximums
- Individual coverage: $7,000
- Family coverage: $14,000
- 2022 HSA Out-of-Pocket Maximums
- Individual coverage: $7,050
- Family coverage: $14,100
Maximize Your Contributions to Maximize Your HSA Tax Savings
Regardless of year, when factoring your HSA contributions and your tax savings potential, there’s a simple strategy to keep top of mind—the more you contribute to your HSA, the more money you save.
When you contribute the maximum HSA contribution limit to your HSA each year, you lock in maximum upfront tax savings, while also boosting your account with the most tax-free dollars to save and invest for the long term. With maximum HSA contributions year over year plus the tax-free growth of your HSA interest and any HSA funds you’re investing, you’re able to save the most possible money in taxes each year while also building the most tax-free equity and setting yourself up for a brighter financial future—both for future healthcare costs, as well as any other expenses you choose to use your HSA funds for without penalty after you turn 65.
And remember, with an HSA, your funds are always there if and when you need them, and you have the ability to adjust your contributions on the fly anytime you want—you’re not limited to setting your HSA contributions only during open enrollment. So while planning ahead for 2022 and beyond is never a bad thing, you’re never locked in to one HSA contribution approach.
Also keep in mind, there’s no time limit on reimbursing yourself with your tax-free HSA dollars. As long as an expense is HSA-eligible, and as long as it’s incurred when your HSA is open, it’s qualified to use HSA funds for. Whether you take advantage of that immediately, or even a decade or more down the road, with an HSA, the choice is always yours.
Get the Tools You Need to Achieve HSA Success With Bend
With the recent IRS announcement of 2022 HSA limits, there’s no better time than now to revisit your HSA contribution strategy for 2021 and to start thinking about 2022.
If you need any help along the way, Bend is here to provide all the tools, education and resources you need to make the most of your HSA, no matter your comfort level with or your knowledge of HSAs. Bend makes HSAs easy for everyone and provides the personalized, timely guidance you need to ensure you’re never in the dark when it comes to your HSA.
And don’t forget—you can have more than one HSA, and you can also open an HSA at any time throughout the year. So, if you’re looking for the best HSA to give you the best results, look no further than Bend HSA.
Open your Bend HSA today
Get started working toward an even brighter financial future.
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