2024 HSA contribution limits: Key numbers to know

Health savings accounts, or HSAs, have higher contribution limits in 2024, allowing you to save more for healthcare expenses if you’re using a high-deductible healthcare plan. An HSA provides you with key tax advantages, including the potential for a triple tax benefit: tax-free contributions, tax-free capital gains and tax-free withdrawals used for healthcare expenses.

Here are the contribution limits for HSAs in 2024 and other key HSA eligibility requirements.

HSA contribution limits for 2024

Your maximum annual contribution to an HSA is determined by a few elements, including who you’re covering and importantly how long you’re covered by an eligible healthcare plan.

Your maximum contribution is determined by whether you’re covering yourself only or a family, and also whether you’re age 55 and older.

• The maximum contribution for self-only coverage is $4,150
• The maximum contribution for family coverage is $8,300.
• Those age 55 and older can make an additional $1,000 catch-up contribution.
• Add those figures up and a couple could save as much as $10,300 in their HSAs, if they maxed out their accounts and were both at least age 55.

Some employers may add additional contributions to your account, but regardless of how much your company adds, you’re still capped at the maximum for your plan type, whether self or family. So if your company adds $1,500 to your self-only plan, you’ll be able to add at most an incremental $2,650 to the plan, taking you to the full $4,150 for the year.

If you contribute too much, the IRS can hit you with substantial penalties. But the best health savings accounts help you avoid contributing too much. Plus, top HSAs also allow you to invest your funds into potentially high-return assets.

HSA contribution limits for those not covered for a full year

It’s also important to know that while those are the annual maximums, you’ll only be able to contribute to an HSA for the months that you’re actually enrolled in an eligible healthcare plan at the first of the month. For example, if you had an eligible healthcare plan through July 27, you’d be able to contribute a prorated amount of seven-twelfths of the annualized amount.

To put that into actual numbers, you’d be able to contribute $2,420.83 on a self-only HSA, or the annual amount of $4,150 (for 2024) multiplied by 7/12.

However, even this rule has an important exception that consumers should know about, and it’s called the “last-month rule.” The IRS allows those who are enrolled in an eligible healthcare plan to make a full year’s worth of HSA contributions if they’re enrolled in a plan as of December 1.

Here’s the catch to the last-month rule: You’ll need to stay enrolled in the eligible healthcare plan from December 1 to December 31 of the following year. If you leave the healthcare plan before that following year is up, however, the IRS will levy income taxes on any excess contributions and then add on a 10 percent bonus penalty on those excess contributions.

HSA eligibility requirements

To be able to contribute to an HSA, you’ll need to be enrolled in an HSA-eligible healthcare plan, also known as a high-deductible healthcare plan, among a few other conditions:

• A self-only healthcare plan must have a minimum annual deductible of $1,600 and an annual out-of-pocket limit of at least $8,050 in 2024.
• A family healthcare plan must have a minimum annual deductible of $3,200 and an annual out-of-pocket limit of at least $16,100 in 2024.

In addition, you’ll also need to meet the following conditions:

• You’re not claimed as a dependent on someone else’s tax return for that tax year.
• You’re not enrolled in Medicare.
• You’re not enrolled in a healthcare plan that is not HSA-eligible.

You generally can’t be covered by another healthcare plan and also have a high-deductible plan. But you can contribute to an HSA as a married individual if you’re covered by a high-deductible plan as long as you’re not covered under your spouse’s healthcare plan.

Bottom line

Health savings accounts can provide some powerful tax benefits for those using them, but make sure you’re eligible to use one and that you don’t go over the annual contribution limits. In fact, an HSA can offer some powerful retirement benefits, too, and some individuals use their HSA as a retirement account.