Recently the Internal Revenue Service (IRS) announced (see Revenue Procedure 2016-28) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2017.  Although one of the dollar limits currently in effect for 2016 will change, the majority of the limits will remain unchanged for 2017, with some of the limits remaining unchanged since 2015.  The table below compares the applicable dollar limits for HSAs and HDHPs for 2016 and 2017.

HEALTH AND WELFARE PLAN LIMITS 2017 2016 HDHP – Maximum annual out-of-pocket limit (excluding premiums): Self-only coverage $6,550 $6,550 Family coverage $13,100 $13,100 HDHP – Minimum annual deductible: Self-only coverage $1,300 $1,300 Family coverage $2,600 $2,600 HSA – Annual contribution limit: Self-only coverage $3,400 $3,350 Family coverage $6,750 $6,750 Catch-up contributions (age 55 or older) $1,000 $1,000

Plan sponsors should update payroll and plan administration systems for the 2017 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment and communication materials, plan documents and summary plan descriptions.

For further information about applying the new HSA and HDHP plan limits for 2017, contact your regular McDermott lawyer or one of the contacts listed below.