Each year, various federal regulators announce cost-of-living adjustments (COLAs) affecting tax, employee benefits dollar amounts and penalties for the upcoming calendar year. Adjustments for 2023 that are most relevant to health and benefits plans are listed below. For prior amounts and changes from 2022, please download the GBS PDF summary.
2023 COLAs for Benefit Plans
Maximum Annual Contribution – Individual Coverage: $3,850
Maximum Annual Contribution – Family Coverage: $7,750
Catch-up Contribution – age 55 and over – IRC §223(b)(3): $1,000
Minimum Annual Deductible – Individual Coverage: $1,500*
Minimum Annual Deductible – Family Coverage: $3,000*
Maximum Out-of-Pocket Expenses – Individual Coverage: $7,500
Maximum Out-of-Pocket Expenses – Family Coverage: $15,000
* For individuals with family coverage, no amounts can be paid from the HDHP (other than for preventive care) until the required minimum annual deductible for family HDHP coverage has been satisfied. Thus, an HDHP is not qualified if there is an “embedded” individual deductible (i.e., an individual deductible within the family (“umbrella”) deductible) that is lower than the minimum required deductible for HDHP family coverage. For example, a minimum annual individual deductible for 2023, if embedded, must be at least $3,000.00 (which is the 2023 minimum annual deductible for family coverage).
Maximum Out-of-Pocket Expenses – Individual Coverage: $9,100
Maximum Out-of-Pocket Expenses – Family Coverage: $18,200
Minimum HDHP Deductible – Individual Coverage: $2,650
Minimum HDHP Deductible – Family Coverage: $5,300
Maximum HDHP Deductible – Individual Coverage: $3,950
Maximum HDHP Deductible – Family Coverage: $7,900
Maximum HDHP Out-of-pocket – Individual Coverage: $5,300
Maximum HDHP Out-of-pocket – Family Coverage: $9,650
Health FSA maximum contribution, regardless of marital status: $3,050
Health FSA carryover limit: $610
Dependent Care Assistance Plan (DCAP) maximum contribution, if employee is married and filing a joint return or is a single parent filing as “House of Household” – IRC § 129: $5,000
Dependent Care Assistance Plan (DCAP) maximum contribution, if employee is married but filing a separate return from spouse: $2,500
QSEHRA Max Reimbursement Allowed – Individual Coverage: $5,850
QSEHRA Max Reimbursement Allowed – Family Coverage: $11,800
EBHRA Max amount newly made available for a Plan Year: $1,950
- ICHRA: No limits
Highly Compensated Employee (HCE) Threshold – IRC §414(q)(1)(B): 2023 limits have not yet been released. 2022 limit: $135,000
Key Employee, Officer – IRC § 416(i)(1)(A)(i): 2023 limits have not yet been released. 2022 limit: $200,000
Annual 5000A(c) penalty for individual not having “minimum essential coverage” (MEC): greater of dollar amount or percentage of modified adjusted gross income (MAGI): $0
Annual 4980H(a) penalty for large employer not offering MEC to at least 95% of full-time employees. Multiply penalty amount by total number of full-time employees minus 30: $2,880
Annual 4980H(b) penalty for large employer not offering affordable minimum value coverage to all full-time employees. Penalty amount is per each full-time EE who qualifies for a subsidy to buy insurance in the marketplace: $4,320
Affordability Percentage for Employer Shared Responsibility: 9.12%
Federal Poverty Line salary for household size of one: $13,590
Parking: $300 / mo
Transit Passes & Vanpooling (combined): $300 / mo
