The Internal Revenue Service ("IRS"), has just released their annual limits for 2023.   Yes, this is the kind of thing that gets me all excited.   It must be hard for the IRS, whose sole purpose is to collect taxes, to furnish us the new limits allowing for greater tax savings for astute health plan participants who like to save money and make the most out of our estate planning.   This does not mean we do not believe in paying our fair share ... it only means we do not like to pay more than our fair share.

The IRS got crazy this year and decided to up the single HSA maximum again by $200 to $3,850, and the family maximum increased by $450 to $7,750. The minimum deductible amount increased by $100 to $1,500 to make it easier for a plan to qualify as a qualified high deductible health plan (QHDHP) in CY 2023. Given health care cost increases for medical and prescription drugs, a $1,500 is no longer considered a "high deductible" in the industry.

Here is a snapshot of 2022 vs. 2023 changes, relevant to QHDHPs and HSAs for plan sponsors:

2023 HSA Maximum

• Single: $3,850 (2022 it is $3,650)

• Family: $7,750 (2022 it is $7,300)

2023 HSA Minimum Deductible

• Single: $1,500 (2022 it is $1,400)

• Family: $3,000 (2022 it is $2,800)

2023 Maximum Out of Pocket

• Single: $7,500 (2022 it is $7,050)

• Family: $15,000 (2022 it is $14,100)

HSA catch-up contributions for those age 55 and older are still $1,000 (no change). Keep in mind this is a different age requirement on catch-up contributions permitted under 401(k) plans (age 50 permissible).

The IRS has been getting better about releasing these dollar limits to prepare for next year's open enrollment earlier each year so we can assist our clients with 2023 planning. If you are an employer and do not offer a qualified health plan, then employees with family coverage (in the 37% marginal tax bracket) are being forced to pay an additional $2,868 a year that goes straight to Uncle Sam. He will gladly take it.

At least 81% of employers offered such a plan as an option and one-third provide a consumer-driven health plan as the only option, according to the National Business Group on Health. Thinking through the right tax and design strategy for all your health plan participants is why you want a good benefits advisory firm on your side to help you design, administer, negotiate, communicate and deploy these types of plans.

It was over a decade ago that me and a progressive Fortune 500 client out of Austin, launched the very first CDHP with HSA in the state of Texas ... those whose accounts have built up over the years have shared their gratitude. It is also a balanced perspective to read the articles I wrote for D Healthcare, entitled “Skin in the Game is Not Working and Simplifying Health Plans and Controlling Costs, that still hold up today.