February 14, 2023
The IRS recently released the updated Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans for use in preparing 2022 tax returns. This publication provides basic information about Health Savings Accounts (HSAs), Medical Savings Accounts (MSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs), such as eligibility requirements, contribution limits and distribution rules.
The latest update includes reminders on important provisions for consumer-driven healthcare plans:
- HSAs:
- HDHPs may have a $0 deductible for telehealth or other remote care services for plan years beginning before 2022, months beginning after March 2022 and before 2023, and plan years beginning after 2022 and before 2025 and still preserve HSA eligibility for individuals.
- HDHPs may have a $0 deductible for selected insulin products for plan years beginning after 2022 and still preserve HSA eligibility for individuals.
- HDHPs may provide benefits under federal or state anti-'surprise billing' laws with a $0 deductible for plan years beginning after 2021 and still preserve HSA eligibility for individuals.
- Health FSAs:
- 2022 annual limit increased to $2,850, and carryover allowance increased to $570 for plan years beginning in 2022.
- 2023 annual limit increases to $3,050, and carryover allowance increases to $610 for plan years beginning in 2023 (see our October 25, 2022, article in Compliance Corner).
- Home testing for COVID-19 and personal protective equipment remain eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs or Archer MSAs.
Employers should be aware of the availability of the updated publication and reference as needed.