IRS Reduces 2018 HSA Contribution Limit

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  • March 9, 2018



On March 5, 2018, the IRS announced a reduction in the amount that an individual with family coverage under a high deductible health plan (“HDHP”) can contribute to a health savings account (“HSA”) for 2018. The lowering of the contribution limit, announced in Revenue Procedure 2018-18, is made to reflect statutory amendments included in recent Budget Act reconciliation legislation.

The 2018 contribution limit that the IRS previously announced was $6,900. The revised limit is $6,850, which is $50 less. All of the other HSA limits remain the same for 2018, as indicated in the table below.

Many employers allow employees covered under an HDHP to make HSA contributions on a pre-tax payroll deduction basis. HSA elections for 2018 will already have been made. As such, employers will need to adjust the payroll deductions for those employees who elected to make the maximum contributions so as not to exceed the reduced contribution limit.

2018 Health Savings Account Limits

 

Original Limit

Revised Limit

Annual HSA contribution limit

– Self-only coverage

– Family coverage

– Catch-up contribution

 

$3,450

$6,900

$1,000

 

$3,450

$6,850

$1,000

Out-of-pocket spending limit

– Self-only coverage

– Family coverage

 

$6,550

$13,100

 

$6,650

$13,300

Minimum annual deductible

– Self-only coverage

– Family coverage

 

$1,350

$2,700

 

$1,350

$2,700

If you have questions regarding the updated HSA contribution limits, contact us at solutions@gsanational.com or 1-800-250-2741 ext. 170.

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This article was written by Walter W. Miller. Walter helps employers to comply with the myriad of laws governing retirement plans and other employee benefit programs. A primary focus of Mr. Miller's current practice is the Affordable Care Act, including the employer "play-or-pay" mandates. He works with clients to evaluate the effect of the new law on their group health plans, and offers advice as to the manner of addressing the new rules. He is listed both in The Best Lawyers in America and SuperLawyers as being among the top attorneys in the field of employee benefits. He has also been elected as a Fellow of the American College of Employee Benefits Counsel, which is regarded as the preeminent professional association for employee benefits attorneys.

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