IRS Keeps Employers and Participants with HSAs Busy Adjusting Contribution Limits

 April 30 2018     Shelly Hodges-Konys

In an effort to make sure that benefits professionals across the country stay busy adjusting health savings account contributions (HSA) for employees, the Internal Revenue Service (IRS) released guidance on Thursday afternoon applicable to 2018 HSA contribution limits.  The new ruling allows individuals with family high deductible health plan coverage to once again treat the originally announced maximum contribution limit of $6900 as the maximum family HSA contribution limit for 2018.  If you recall, the IRS changed the method for calculating contribution limits in March and announced a retroactive $50 decrease in the contribution limit from $6900 to $6850. 

Revenue Procedure 2018-27 reinstates the originally published $6900 family HSA limit for calendar year 2018.  Many individuals and employers were frustrated with the original change announced as a result of the Tax Cuts and Jobs Act in March.  Many benefits administration and payroll systems were already programmed with the $6900 limit in self-directed systems and HSA participants had already made maximum contributions for the year. 

While this relief is welcome, it also creates a little more work for those benefits professionals and individuals who had already made corrections to the contribution limits.