Sponsor spotlight: New health savings account limits on horizon for 2023

Contribution limits for the ever-popular health savings account (HSA) are set for 2023. The new limits are outlined here with current year amounts noted for comparison. So plan now for your 2023 contributions.

What is an HSA?

An HSA is a tax-advantaged savings account whose funds can be used to pay qualified health care costs for you, your spouse and your dependents. The account is a great way to pay for qualified health care costs with pre-tax dollars. In fact, any investment gains on your funds are also tax-free as long as they are used to pay for qualified medical, dental or vision expenses. Unused funds may be carried over from one year to the next. You must be enrolled in a high-deductible health plan (HDHP) to use an HSA.

The limits

Note: An HDHP plan has minimum deductible requirements that are typically higher than traditional health insurance plans. To qualify for an HSA, your health coverage must have out-of-pocket payment limits in line with the maximums noted above.

The key is to maximize funds to pay for your medical, dental, and vision care expenses with pre-tax money. By building your account now, you could have a nest egg for unforeseen future expenses.

— By Nancy J. Ekrem, CPA
Managing Shareholder
DME CPA Group PC
Certified Public Accountants & Business Consultants
nekrem@dmecpa.com

425-640-8660

 

 

  1. Why is this changing? Many clients benefit from their health saving plan. Is this another example of the government overreaching or what is the reason for reducing the benefits?

  2. Nancy, thanks for the update. One area of caution is to be sure that the Medical plan selected is a “Qualified HSA” plan.
    There are high deductible plans that do not qualify to have the separate HSA bank account.
    We have had people come to us and were shocked that their plan did not qualify yet they had the banking part and were deducting the contributions.
    The Contributions and Deductibles have been increasing annually since these started about 20 years ago.
    An HSA can be great option, but don’t be blinded because there is a tax-deductible opportunity.
    There are two components to an HSA; Tax & Insurance. Make sure you are using a professional in each area.

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