HSA/HDHP Limits Will Increase for 2025
On May 9, 2024, the IRS released Revenue Procedure 2024-25 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2025. The IRS is required to publish these limits by June 1 of each year.
These limits include the following:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP. Eligible individuals with self-only HDHP coverage will be able to contribute $4,300 to their HSAs for 2025, up from $4,150 for 2024. Eligible individuals with family HDHP coverage will be able to contribute $8,550 to their HSAs for 2025, up from $8,300 for 2024. Individuals age 55 and older may make an additional $1,000 “catch-up” contribution to their HSAs.
The minimum deductible amount for HDHPs increases to $1,650 for self-only coverage and $3,300 for family coverage for 2025 (up from $1,600 for self-only coverage and $3,200 for family coverage for 2024). The HDHP maximum out-of-pocket expense limit increases to $8,300 for self-only coverage and $16,600 for family coverage for 2025 (up from $8,050 for self-only coverage and $16,100 for family coverage for 2024).
The following chart shows the HSA and HDHP limits for 2025 as compared to 2024. It also includes the catch-up contribution limit that applies to HSA-eligible individuals age 55 and older, which is not adjusted for inflation and stays the same from year-to-year.
| Type of Limit | 2024 | 2025 | Change | |
| HSA Contribution Limit | Self-only | $4,150 | $4,300 | Up $150 |
| Family | $8,300 | $8,550 | Up $250 | |
| HSA Catch-up Contributions (not subject to adjustment for inflation) | Age 55 and older | $1,000 | $1,000 | No change |
| HDHP Minimum Deductible | Self-only | $1,600 | $1,650 | Up $50 |
| Family | $3,200 | $3,300 | Up $100 | |
| HDHP Maximum Out-of-Pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) | Self-only | $8,050 | $8,300 | Up $250 |
| Family | $16,100 | $16,600 | Up $500 | |
Employer Takeaway
Employers sponsoring HDHPs should review their plan’s cost-sharing limits (i.e., the minimum deductible amount and maximum out-of-pocket expense limit) when preparing for the plan year beginning in 2025. Also, employers allowing employees to make pre-tax HSA contributions should update their plan communications with the increased contribution limits.
Preparing for the FTC’s Noncompete Ban
As we mentioned last month, the Federal Trade Commission (FTC) voted to issue a final rule that would prohibit employers from entering into or enforcing noncompete clauses with most employees. The final rule was published in the Federal Register on May 7, 2024, and is scheduled to take effect 120 days after such date on Sept. 4, 2024.
Subject to very limited exceptions, the final rule provides that:
- The use of noncompete clauses will be banned as of the effective date;
- Any existing noncompete clauses (other than those entered into with senior executives) will be invalidated; and
- Employers must notify all employees (other than senior executives whose existing noncompete agreements will remain enforceable) that their existing noncompete agreements will not be enforced.
Employers that use noncompete or similar protective clauses should familiarize themselves with the rule’s requirements and take steps now to prepare for its effective date. Employers should note, however, that at least three lawsuits (including one brought by the U.S. Chamber of Commerce) seeking to block the final rule have already been filed, so employers should monitor for additional legal challenges and prepare for potential uncertainty.
Please see our Compliance Bulletin that provides an overview of the key provisions of the final rule and steps employers may take to prepare for the FTC’s ban on noncompete clauses.
Final Deadline Reminder: RxDC Reports Are Due by June 1, 2024
Group health plans and health insurance issuers must annually submit detailed information on prescription drug and health care spending to the federal government. This reporting is referred to as the “prescription drug data collection” (or “RxDC report”). This is an annual reporting requirement—plans and issuers must submit these reports by June 1 of each year, covering information for the prior calendar year.
The next RxDC report is due by Saturday, June 1, 2024, covering data for 2023. Employers should confirm they are taking steps to comply with this reporting deadline, such as providing information to third-party vendors on a timely basis.
Employer Takeaway
Employers should consider taking the following steps to comply with the RxDC reporting requirement:
- Reach out to issuers, TPAs or PBMs, as applicable, to confirm they will submit RxDC files for your health plan;
- Respond promptly to any information requests from the third party submitting the RxDC files for your health plan;
- Confirm that your written agreement with the third party submitting RxDC files has been updated to include this reporting responsibility; and
- For self-insured health plans, monitor the third party’s compliance with the RxDC reporting requirement.
