HSA contribution limits set to increase

WASHINGTON—The maximum contribution that can be made to a health savings account in 2008 will increase and the maximum out-of-pocket expenses that employees can be required to pay also will rise, the Internal Revenue Service announced Friday.

In 2008, the maximum contribution that can be made for employees with single coverage will be $2,900, up from $2,850 this year, and the maximum contribution for employees with family coverage will rise to $5,800, up from $5,650, the IRS said.

Additionally, the maximum out-of-pocket expense—including deductibles—that employees with single coverage can be required to pay will rise to $5,600 next year, up from $5,500 in 2007, and to $11,200 for employees with family coverage.

The new limits reflect increases in the cost of living.

About 4.5 million people, as of January 2007, were covered by HSAs, including just over 2 million employees and dependents working at companies with more than 50 employees, according to a survey by Washington trade group America's Health Insurance Plans.