On May 10, 2018, the IRS released Revenue Procedure 2018-30 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2019. These limits include:
The maximum HSA contribution limit;
The minimum deductible amount for HDHPs; and
The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP.
The IRS limits for HSA contributions will increase for 2019. The HDHP maximum out-of-pocket limits will also increase for 2019. The HSA contribution limits will increase effective Jan. 1, 2019, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2019.
IRS Updates Employer Guide for 2018 Tax Changes to Fringe Benefits
Employers that offer fringe benefits should review the 2018 version of Publication 15-B and work with their tax advisors to implement the tax changes.
IRS Announces Second Change to HSA Family Contribution Limit
Earlier this year, a tax law change for 2018 reduced the health savings account (HSA) contribution limit for individuals with family high deductible health plan (HDHP) coverage from $6,900 to $6,850. On April 26, 2018, the IRS announced that, for 2018, taxpayers with family HDHP coverage may treat $6,900 as the annual contribution limit to their HSAs.
Why was the limit changed again?
After the IRS reduced the HSA limit for individuals with family HDHP coverage, it received feedback from various stakeholders, including employers, that the change would be disruptive and costly to implement. For example, some individuals with family HDHP coverage made the full $6,900 HSA contribution before the limit was reduced, and many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit.
In response to these concerns and others, the IRS issued Revenue Procedure 2018-27, which allows taxpayers with family HDHP coverage to use the original $6,900 HSA contribution limit for 2018.