Image Source: Pexels
 

It’s going to cost you more. What this time? Health Savings Account Plan deductibles. They’re driven by IRS rules for automatic inflation adjustment. And with inflation continuing to go up, so will next year’s HSA deductibles.

In 2024, the minimum deductible for employee-only coverage will be $1,600, up from $1,500 in 2023, and the family coverage deductible will be $3,200, up from $3,000 this year. For both employee-only and family coverage that’s a 6.6% increase.

Since you’ve got some lead time before the 2024 HSA deductibles take effect, what should you consider doing now? Kelly Long, founder of Financial Bliss with Kelly Long has some suggestions.

• First of all, make sure you’re contributing the maximum you can afford into your HSA so you can have tax-free savings available to handle larger out-of-pocket healthcare costs. Ideally, that would be the annual maximum but if you can only afford the deductible amount, you’ll need to adjust your budget to put a little more in each paycheck. The good news is that HSA contributions come out of your paycheck tax-free, so adding the $4 or so you’d need to increase by $100 if you’re paid bi-weekly won’t even reduce your paycheck by $4.
• Second, this is a good reminder that you can shop around for certain healthcare services such as prescriptions, acute care such as opting for urgent care over the ER, and even consider choosing a Nurse Practitioner as your primary care provider to reduce the cost of office visits outside of preventive care. If you need routine outpatient surgery, consider a clinic over a hospital, which is often thousands cheaper, and don’t necessarily rely on your primary care provider to know who will be the most cost-effective. When I had my gallbladder removed, it was $1,400 at a local clinic while having it done at the hospital took me to my out-of-pocket limit for the year!

Until you’ve met your deductible, think of your insurance as more of a discount program that reduces the cost you pay by using in-network providers rather than a system that pays for your healthcare, which is more what it feels like when you use a non-High Deductible plan. Your insurance website or app will have tools to help you find the cost of different care based on where you go – use those tools!

• Finally, make sure you’re using your right to have an annual checkup for preventive care, including mammograms and colonoscopies when applicable. Those don’t cost a thing (as long as you stay in-network) and can identify health issues early on that you can address with lifestyle changes before they get so bad that you need drugs or other expensive procedures.
   

2023 HSA Contribution Limits

The HSA contribution limits for 2023 are $3,850 for employee-only coverage and $7,750 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
 

HSA eligibility

To contribute to an HSA, you must be enrolled in an HSA-eligible health plan. For 2023, this means:

• An annual deductible of at least $1,500 for employee-only coverage and $3,000 for family coverage
• The out-of-pocket maximum does not exceed $7,500 for employee-only coverage and $15,000 for family coverage
   

To Contribute

• You cannot be enrolled in a health plan that is not an HSA-eligible plan, such as a full-purpose health care flexible spending account (FSA)
• Cannot be enrolled in Medicare
• Cannot be claimed as a dependent on someone else’s tax return
   

HSA Contribution Deadline

You generally have until the tax filing deadline to contribute to an HSA for the previous year.

More By This Author: