What is the HSA testing period and how do I calculate my contribution limit?

Under the testing period, if you use the last-month rule, you must also remain an eligible individual (retain your same coverage under the CDHP or other high-deductible health plan) for the following 12 months. If you fail to remain an eligible individual (i.e., if you change coverage from the CDHP to the LD, EPO, HMO or enroll in Medicare, etc.) any “extra” contributions you made as a result of the last-month rule must be included in your gross income. Also, a 20% additional tax applies to this amount. Your excess contributions are determined by the contribution limit divided by 12 months, compared to your time eligible.

To calculate your personal contribution limit:
1. Take the total annual contribution limit based on your coverage type (individual or family)
2. Divide that amount by 12
3. Multiply it by the number of months that you qualify that year

For example, see the chart below where the contribution limits for 2022 are $3,650 for the individual and $7,300 for the family. Active employees aged 55 and older are allowed an additional $1,000 catch-up amount of $4,650 and $8,300, respectively. Keep in mind that contribution limits also include employer contributions from PEBP.

Number of months Individual Family
12 months $3,650 $7,300
11 months $3,345 $6,691
10 months $3,041 $6,083
9 months $2,737 $5,474
8 months $2,433 $4,866
7 months $2,129 $4,258
6 months $1,824 $3,649
5 months $1,520 $3,041
4 months $1,215 $2,433
3 months $912 $1,824
2 months $608 $1,216
1 month $304 $608


Categories: CDHP with HSA or HRA, Health Savings Account (HSA)