For 2014, Higher Limits for HSA Contributions, Out-of-Pocket Expense

The Internal Revenue Service announced higher limits for 2014 on contributions to health savings accounts (HSAs) and for out-of-pocket spending under high-deductible health plans (HDHPs) linked to them.
In Revenue Procedure 2013-25, issued May 2, 2013, the IRS provided the inflation-adjusted HSA contribution and HDHP minimum deductible and out-of-pocket limits, effective for calendar year 2014. The higher rates reflect a cost-of-living adjustment and rounding rules under Internal Revenue Code Section 223.
A comparison of the 2014 and 2013 limits is shown below:

Contribution and Out-of-Pocket Limits for Health Savings Accounts and for High-Deductible Health Plans
	For 2014	For 2013
HSA contribution limit (employer + employee)	Single: $3,300 Family: $6,550	Single: $3,250 Family: $6,450	Single: +$50 Family: +100
HSA catch-up contributions (age 55 or older)*	$1,000	$1,000	No change**
HDHP minimum deductibles	Single: $1,250 Family: $2,500	Single: $1,250 Family: $2,500	No change
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)	Single: $6,350 Family: $12,700	Single: $6,250 Family: $12,500	Single: +$100 Family: +$200
* Catch-up contributions can be made any time during the year in which the HSA participant turns 55. ** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.

The increases in contribution limits and out-of-pocket maximums from 2013 to 2014 were somewhat lower than the increases a year earlier, reflecting the government's calculation of a more modest inflation rate. From 2012 to 2013 the contribution limit rose $150 for individual coverage and $200 for family plans, while maximum out-of-pocket amounts rose $200 for individuals and $400 for families, and HDHP minimum deductible amounts rose $50 for individuals and $100 for families.


Penalties for Nonqualified Expenses
Those under age 65 (unless totally and permanently disabled) who use HSA funds for nonqualified medical expenses face a penalty of 20 percent of the funds used for such expenses. Funds spent for nonqualified purposes are also subject to income tax.