FSA, 401K contribution limits to rise

According to recent figures released by the Internal Revenue Service, limits on out-of-pocket expenses and contributions to flexible spending accounts, 401(k)s, health savings accounts and high-deductible health plans will increase in 2024.

These increases come as the inflation rate remains stubbornly high at 3.2% in October. And economists say this rate is not likely to fall to the Fed’s long-term target of 2% in 2024. Contribution limits to health savings accounts, for example, are adjusted for inflation by the IRS. The changes are slated to take effect Jan. 1.

Employees can save money on their income tax bills with larger contributions to their 401(k), HSAs and FSAs, improving their own financial picture, notes Julie Stich, vice president of content at the International Foundation of Employee Benefit Plans.

“If you encourage employees to take advantage of 401(k)s, FSAs and HSAs, it helps employees with their financial wellness, which employers care about,” Stich says.

As HR leaders plan for 2024, here is a look at how contribution and out-of-pocket expense limits are shaping up for the new year.

What are the 2024 401(k) limit changes?



Catch-up limit, 50-year-olds+

^{Source: WEX and HRE research}

$23,000: 401(k) pre-tax contribution limits

Limits for employee contributions to 401(k), 403(b), most 457 plans and the Thrift Savings Plan for federal employees are increasing to $23,000 in 2024, a 2.2% increase from this year, according to the IRS.

$7,500: 401(k) catch-up contribution limit

Meanwhile, employees 50 or older can add a catch-up contribution of $7,500 to their 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan in 2024. That figure remains the same from this year. Eligible participants, as a result, can contribute up to a total of $30,500 for their retirement plan in 2024.

What are the 2024 HSA limit changes?


Self-only contribution limit
Family contribution limit
HSA catch-up contributions

^{Source: WEX and HRE research}

$4,150: Annual HSA contribution limit for individuals

Health savings account contribution limits for individuals with self-only coverage will jump 7.8% to $4,150 next year—a significant increase from 2023, which saw a 5.5% bump from the previous year.

$8,300: HSA contribution limit for family coverage

As for family plans, HSA contribution limits will leap 7.1% to $8,300 in 2024—a greater increase than the 6.2% jump between 2022-23.

$1,000: HSA catch-up contributions

Employees who are 55 and older, meanwhile, can contribute an additional $1,000 to their health savings account in 2024, a figure that remains unchanged from 2023.

What are the 2024 HDHP amounts/limits?

HDHP (self-only coverage)

^{Source: WEX and HRE research}

$1,600: HDHP minimum deductible for individuals

For individuals, the minimum deductible for a high-deductible health plan must be at least $1,600 in 2024, up 6.7% from 2023. Employees, however, get some relief compared to this year, which saw a 7.1% increase over 2022.

$8,050: HDHP maximum out-of-pocket for individuals

The maximum out-of-pocket limit for individual coverage will increase by 7.3% to $8,050 in the new year, from $7,500 in 2023; there was a smaller 6.4% increase from last year. The out-of-pocket expense includes deductibles, co-payments and other amounts, but not premiums.

$3,200: HDHP minimum deductible for families

For 2024, the minimum deductible for a family health plan will be at least $3,200, up from $3,000 in 2023. This represents a 6.7% increase in 2024 over a year earlier, though not as high as the 7.1% jump from 2022-23.

$16,100: HDHP maximum out-of-pocket for families

Meanwhile, the maximum out-of-pocket expenses under a family health plan are limited to $16,100 for next year, 7.3% higher than this year’s limit, which is $15,000.