2018 HSA Family Maximum Contribution Decreased

 March 7 2018     Shelly Hodges-Konys and Diane Cross
This week, the IRS released IRS Notice 2018-10 which provides revised cost-of-living adjustments impacting Health Savings Account (HSA) contributions (and other issues). A provision of the Tax Cuts and Jobs Bill, enacted in the final weeks of 2017, changes the way the IRS calculates cost-of-living increases. As such, the IRS provided recalculated limitations, which has an impact on 2018 HSA contributions as described below.

2018 HSA Contributions
As previously announced, the HSA maximum contribution for those enrolled in High Deductible Health Plan (HDHP) family coverage was $6,900 for 2018. Per the IRS, the HSA maximum contribution for family HDHP coverage has decreased by $50 to a new limit of $6,850. All other related HSA/HDHP limits remain the same for 2018:

HDHP Minimum Deductible Self-Only: $1,350/Family: $2,700

HDHP Maximum Out-of-Pocket Self-Only: $6,650/Family: $13,300

HSA Contribution Limit Self-Only: $3,450/Family: $6,850

What does this mean for employers sponsoring HDHP/HSA plans?
Employers, if contributing to their employees’ HSA, should review their contribution strategy to ensure that it does not create excess contributions for employees with family coverage. They should also review their benefits administration and/or payroll systems to make sure that the correct family limit is communicated and programmed in the system. Additionally, employers should communicate this change to their employees with family coverage so that those employees can make any contribution changes to avoid excess contributions.

What does this mean for HSA account holders enrolled in HDHP family coverage?
HSA account holders will need to take note of this adjustment and plan future contributions accordingly – this could mean that election changes may be required. For individuals who may have already contributed the full family maximum based on the previously announced limit of $6,900, they should contact their HSA institution for more information regarding how to manage the excess contributions.

Please contact your HORAN representative with any questions.