2018 HSA Family Contribution Limit Reduced by $50

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On March 5, 2018, the Internal Revenue Service (IRS) announced a reduction in the maximum annual contribution allowed for Health Savings Accounts (HSAs) in 2018. The change does not affect people whose HSA contributions are based on self-only health coverage, but it does affect those with family coverage under a qualifying High Deductible Health Plan (HDHP). Previously, the 2018 HSA contribution limit for persons with family HDHP coverage was $6,900. That limit is now reduced retroactively to $6,850.

In Revenue Bulletin 2018-10, the IRS explains that the recently-enacted tax reform law requires recalculating inflation-adjusted amounts under various tax code provisions. One of the affected provisions is § 223 pertaining to HSAs. Using the new required method of applying annual inflation adjustments, the 2018 HSA contribution limit for those with family HDHP coverage is $6,850, which is a $50 reduction from the amount previously announced.

HSA Summary

An HSA is a tax-exempt savings account employees can use to pay for qualified health expenses. To be eligible to contribute to an HSA, an employee:

  • Must be covered by a qualified high deductible health plan (HDHP);
  • Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
  • Must not be enrolled in Medicare; and
  • May not be claimed as a dependent on someone else’s tax return.

HSA 2018 Limits

Limits apply to HSAs based on whether an individual has self-only or family coverage under the qualifying HDHP.

2018 HSA contribution limit:

  • Single: $3,450
  • Family: $6,850
  • Catch-up contributions for those age 55 and older remains at $1,000

2018 HDHP minimum deductible (not applicable to preventive services):

  • Single: $1,350
  • Family: $2,700

2018 HDHP maximum out-of-pocket limit:

  • Single: $6,650
  • Family: $13,300*

*If the HDHP is a nongrandfathered plan, a per-person limit of $7,350 also will apply due to the ACA’s cost-sharing provision for essential health benefits.

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