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What's new for HSAs in 2020?

Jan 22, 2020 9:37:05 AM

We’re just about a month into the new year and a new decade. Time seems to be moving faster and faster. And in all the hustle, it can be hard to carve out time to keep up to date on the changes and updates to all of your accounts—including your health savings account.

Everything you need to know regarding HSA updates and changes for 2020 is here—no need to toggle between tabs and Google searches.

HSA Annual Maximum Contribution Limit Updates – 2020 HSA Contribution Limits are Higher
When it comes to your HSA contributions, the more you contribute, the more you stand to benefit from a tax perspective since your HSA contributions are tax-deductible up to the annual contribution limit—not to mention the better off you’ll be for any expected (or unexpected) healthcare expenses. For 2020, the IRS has raised the HSA maximum annual contribution limit for individuals and for families. And the HSA catch-up contribution limit for 2020 remains the same at $1,000 for any HSA accountholder age 55 or older.

  • Maximum annual HSA contribution limit for 2019
    • $3,500 for individuals
    • $7,000 for families

  • Maximum annual HSA contribution limit for 2020
    • $3,550 for individuals
    • $7,100 for families

  • HSA catch-up contribution limit

For both 2019 and in 2020, any HSA accountholder age 55 or older is eligible to utilize an annual HSA catch-up contribution limit of $1,000 to help grow their account beyond the standard maximum annual HSA contribution limit.

When it comes to your HSA contributions, the most important point to remember to avoid potential tax issues is that you can’t exceed the maximum annual contribution limit for the specific type of coverage you have—individual versus family—as well as your age. And remember, the HSA contribution limit set by the IRS includes ALL contributions made to your health savings account for a given tax year—that means the total sum of all HSA contributions from you, your employer and anyone else can’t exceed the maximum annual contribution limit.

Preventive Care List for HSA Participants Expanded to Include Care for Chronic Conditions in 2020
In July of 2019, the IRS expanded the list of preventive care for HSA participants to include certain care for chronic conditions. Everything added in the July 2019 IRS preventive care list update for chronic conditions is now covered as preventive care in 2020.

This expansion of preventive care coverage for chronic conditions can be a potential game-changer for existing HSA users, as well as for anyone managing a chronic condition who has previously shied away from considering switching to a high-deductible health plan (HDHP) with an HSA.

Typically, your HDHP can’t provide benefits for any medical expenses in any given year until you meet your minimum deductible for that year. However, when the expense is for qualified preventive medical care, you’re able to bypass your deductible—meaning you receive immediate benefits for any care that falls under preventive care. This can equal substantial annual savings for those managing chronic medical conditions. And it’s important to note, it’s not just medical care services for these chronic conditions that’s covered as preventive—it’s also items purchased like prescription drugs.

Preventive care is available in 2020 for HDHP/HSA participants who manage conditions such as:

  •   Asthma
  •   Bleeding disorders
  •   Congestive heart failure
  •   Coronary artery disease
  •   Diabetes
  •   Heart disease
  •   Hypertension
  •   Liver disease
  •   Osteopenia
  •   Osteoporosis
For more details on this preventive care list expansion, as well as a complete list of diagnoses and qualified preventive care, view IRS Notice 2019-45.


HDHP Deductibles and Annual Out-of-Pocket Maximums for HSA Eligibility Have Increased in 2020
If you already have an HSA, you know not everyone is eligible to participate in an HSA. For those who don’t have an HSA or need a quick refresher, here’s a highlight of what’s changed between 2019 and 2020 when it comes to what it takes to qualify to participate in a health savings account.

To qualify for an HSA, you must be enrolled in an HSA-eligible high-deductible health insurance plan (HDHP). In 2019, this meant that your HDHP needed to have a deductible of $1,350 or more for individual coverage, or $2,700 or more for family coverage. Those amounts have increased slightly for 2020, to $1,400 for individuals and $2,800 for families.

Annual out-of-pocket maximums have also increased slightly for HSA-eligible HDHPs. In 2019, HSA eligibility required the annual out-of-pocket maximum for individual coverage to be $6,750 and $13,500 for family coverage. For 2020, the HDHP annual out-of-pocket maximum limits have risen to $6,900 for individuals and $13,800 for families.

Make 2020 the Year You Take Control of Your Financial Health with Help from Bend HSA
So there you have it—all the HSA changes from 2019 to 2020 in one quick read.

Remember, a health savings account is an awesome way to save big on taxes while boosting your bottom line and bettering your overall financial health. Your HSA contributions aren’t taxed, your HSA contributions grow tax-free and any withdrawals from your HSA for qualified medical expenses are also tax-free. Not to mention that with a Bend HSA, you can also make investments with your funds just like a 401(k) once your HSA balance reaches $1,000.

With a Bend HSA, we make it easy for you to get control over your healthcare costs and make the most of your HSA by providing the smartest, most advanced HSA platform on the market—with NO monthly fees for individuals or families. Seriously. No gimmicks. No surprises. No hidden fees. You simply get the best of modern technologies like AI (artificial intelligence) and machine learning, all thoughtfully designed to make your experience easier and always hassle-free.

If you’re already leveraging the Bend HSA advantage, thank you for your partnership. And if you’re not, but ready to experience the best an HSA has to offer, get started today.

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