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.
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:
Limits apply to HSAs based on whether an individual has self-only or family coverage under the qualifying HDHP.
2018 HSA contribution limit:
2018 HDHP minimum deductible (not applicable to preventive services):
2018 HDHP maximum out-of-pocket limit:
*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.
ThinkHR Comply contains a wealth of information on HSAs, HDHPs, the ACA, and everything else about the ever-changing alphabet soup of benefits. Just log onto your Workplace to get the tools, checklists, and commentary you need. Not a customer? Talk to your insurance broker about ThinkHR.