Employers planning ahead for their 2022 benefit plans can now move forward as the IRS has released the 2022 contribution limits and HDHP out of pocket limits for next year. This is of interest to any employer with a high deductible plan.
In Rev. Proc. 2021-25, the IRS released the inflation adjusted amounts for 2022 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.
Out-of-Pocket Limits Applicable to Non-Grandfathered Plans
The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2022.
Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage if the family out-of-pocket limit is above $8,700 (2022 plan years) or $8,550 (2021 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). A one-year extension of transition relief was announced on January 19, extending the transition relief to policy years beginning on or before October 1, 2022, provided that all policies end by December 31, 2022. (This transition relief has been extended each year since the initial announcement on November 14, 2013.)
Next Steps for Employers
As employers prepare for the 2022 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:
- HSA-qualified family HDHPs cannot have an embedded individual deductible that is lower than the minimum family deductible of $2,800.
- The out-of-pocket maximum for family coverage for an HSA-qualified HDHP cannot be higher than $14,100.
All non-grandfathered plans (whether HDHP or non-HDHP) must cap out-of-pocket spending at $8,700 for any covered person. A family plan with an out-of-pocket maximum in excess of $8,700 can satisfy this rule by embedding an individual out-of-pocket maximum in the plan that is no higher than $8,700. This means that for the 2022 plan year, an HDHP subject to the ACA out-of-pocket limit rules may have a $7,050 (self-only)/$14,100 (family) out-of-pocket limit (and be HSA-compliant) so long as there is an embedded individual out-of-pocket limit in the family tier no greater than $8,700 (so that it is also ACA-compliant).
About the Authors. This alert was prepared for CSNW Benefits by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Stacy Barrow or Nicole Quinn-Gato at email@example.com or firstname.lastname@example.org.
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