- The employee’s W-2 wages, as reported in Box 1 (at the start of 2021).
- The employee’s rate of pay, which is the hourly wage rate multiplied by 130 hours per month (at the start of 2021).
- The individual federal poverty level, which is published by the Department of Health and Human Services in January of every year. If using this method, an employee’s premium contribution cannot be more than $104.52 per month.
Out-of-pocket maximums
The IRS also sets out-of-pocket maximum cost-sharing levels for every year. This limit covers plan deductibles, copayments and percentage-of-cost co-sharing payments. It does not cover premiums. The new out-of-pocket limits for 2021 are as follows:- Self-only plans — $8,550, up from $8,150 in 2020.
- Family plans — $17,100, up from $16,300 in 2020.
- Health savings account-qualified self-only plans — $7,000, up from $6,900 in 2020.
- HSA-qualified family plans — $14,000, up from $13,800 in 2020.
