The IRS Reveals Projected Inflation Figures For 2017

In the recently released Rev. Proc. 2016-28, the IRS as identified inflation adjustments to Health Savings Accounts (HSA) for the upcoming 2017 calendar year. Those affected figures include primarily deductions and out-of-pocket expenses, with a noticeable change in language. See comparative quoted segments between the two years below:

“For calendar year 2017, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,400.”

“For calendar year 2017, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,750.”

“For calendar year 2017, a ‘high deductible health plan’ is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.”

“For taxable years beginning in 2016, the term ‘high deductible health plan’ as defined in § 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,450.”

“For taxable years beginning in 2016, the term ‘high deductible health plan’ means, for family coverage, a health plan that has an annual deductible that is not less than $4,450 and not more than $6,700, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,150.”

What has changed? Ranges in deductions are now clearly defined, and while in many cases inflation hasn’t produced a significant jump, out-of-pocket expenses have seen quite an increase. In 2016, individuals with self-coverage could not see out-of-pocket expenses exceeding $4,450. In 2017, that figure has changed to $6,550. For families, the figures has changed from $8,150 to $13,100. As the Affordable Care Act continues bringing new advancements in health care for the coming year, many may see a jump in costs as they receive readily accessible health insurance.