IRS readjusts HSA contribution limit and announces 2019 limits
In March of this year, the IRS adjusted the 2018 HSA contribution limit for individuals enrolled in family coverage down $50 from $6,900 to $6,850. A little over a month later, the IRS reconsidered the retroactive limit adjustment to the inflation-based calculation and allowed the $6,900 limit to remain for the entire 2018 tax year. The IRS also offered guidance (Rev. Proc 2018-27) for individuals who contributed above the limit and received a distribution. But the correction opportunity does not apply to pre-tax employer contributions for employees or employee contributions through a cafeteria plan.
Employers should (again) confirm that they are using the correct contribution limits for HSAs and other welfare plans. Adjusting the HSA limit allows employees to take maximum advantage of the tax savings or corrections, if necessary, under the former lower rate.
As a reminder, relevant plan limits for 2018 are below. Additionally, on May 10, 2018, the IRS announced the inflation-adjusted limits for 2019, which are also included below:
|
HSA Limits |
Self-Only Coverage |
Family Coverage |
|
Annual contribution limit |
2018: $3,450 |
2018: $6,900 |
|
Catch-up contribution (age 55 and older) |
$1,000 |
|
|
HDHP minimum deductible requirements |
$1,350 |
$2,700 |
|
HDHP out-of-pocket maximum |
2018: $6,650 |
2018: $13,300 |
|
Health FSA limit on pre-tax contributions |
$2,650 |
|
|
Dependent care FSA tax exclusion |
$2,500 |
$5,000 |
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