By Kathryn Mayer – June 1, 2014 •
Maximum contributions to health savings accounts will jump slightly next year, the Internal Revenue Service announced in late April. It will increase $50 for individuals and $100 for families.
The agency said the maximum 2015 HSA contribution will be $3,350 for individuals with self-only coverage, up from $3,300 this year. For those with family coverage, the maximum contribution will be $6,650, up from $6,550.
HSA contribution limits are updated annually to reflect cost-of-living adjustments.
The annual limitation on deductions for an individual with family coverage under a high-deductible health plan will be $6,650 for 2015.
The maximum out-of-pocket employee expense will increase next year to $6,450 for single coverage from $6,350, and to $12,900, from $12,700, for family coverage.
The increases are detailed in Revenue Procedure 2014-30, and take effect in January.
Section 125 Premium Only Plan, or a POP Plan is an essential part of any employer group health insurance and ancillary benefit program. Section 125 is the part of the Internal Revenue Code that allows employees to purchase health insurance and other ancillary benefits tax free. A Section 125 Plan legally allows your employees to pay their portion of medical insurance premium and other ancillary benefits premiums using pretax or tax-free dollars.
By utilizing the Section 125 Premium Only Plan to pretax HSA savings the employer saves matching Social Security (FICA), as well as federal unemployment taxes (FUTA) and generally state unemployment taxes. Employer tax savings can average 7 to 10 percent more by utilizing the Section 125 Plan with the HSA module. Employees also save an additional 7.65% in FICA taxes by pretaxing HSA savings through a Section 125 Premium Only Plan. This extra savings is lost to the employer and the employee if the HSA savings is just deducted from the employees gross income on IRS Form 1040.
Core Documents provides employers with everything they need to establish an IRS and DOL compliant Section 125 POP Plan for only $99.00 in PDF version emailed to you as soon as your document is completed. For $149, you can receive the Deluxe Binder option that includes the PDF email version ASAP, and a printed plan document in a 3-ring binder shipped via Priority Mail.
Core Documents, Inc. has been providing free consulting, affordable plan documents, and plan updates as needed for Section 125 Cafeteria Plans and Health Reimbursement Arrangements since 1997. See more information about these fringe benefit plans at Core Documents’ website: https://www.coredocuments.com, or call toll free 1-888-755-3373.
Other blog posts on IRS HSA Contribution Limits & POP Plans:
Employers Are Offsetting Part of ObamaCare Health Insurance Rate Hikes By Using $99 Section 125 Premium Only Plans by Core Documents
TASC’s Position on 2013-54 Individual Health Insurance Premium & Section 125 & HRA Plans