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Several Important Limits to Consider in 2019 Benefits Planning

 July 10 2018     Shelly Hodges-Konys

With so many considerations, it’s easy to lose track of regulatory requirements. Several benefit plan limits that employers should keep in mind during their renewal decision process include, High Deductible Health Plan (HDHP) limits, Health Savings Account Contribution Limits, Affordable Care Act (ACA) Affordability percentages, and ACA maximum out of pocket limits. Following is a summary of those limits for 2019.

High Deductible Health Plans and HSA Limits
In order for an individual to contribute to an HSA, he or she must be enrolled in an HDHP meeting both a minimum deductible and maximum out-of-pocket threshold. Further, HSAs are subject to annual aggregate contribution limits from all sources. Following are the annual contribution, deductible and out-of-pocket limitations for 2019 (as well as the catch-up contribution limit for individuals age 55 and older) including the current limits for reference.

  2018  2019
Maximum HSA Contribution
(Employee + Employer) 

Self-Only:
$3,450

Family:
$6,900


Self-Only:
$3,500

Family: $7,000

Catch-Up
Contribution Limit
$1,000 $1,000
Minimum HDHP Deductible
Self-Only: $1,350

Family: $2,700


Self-Only: $1,350

Family: $2,700

HDHP Out-of-Pocket Maximum 
Self-Only:
$6,650

Family:
$13,300


Self-Only:
$6,700

Family: $13,500


ACA Maximum Out of Pocket Limit
The Affordable Care Act (ACA) also applies an out-of-pocket maximum on expenditures for essential health benefits. Employers should keep in mind that the HDHP and ACA out-of-pocket maximums are different. The IRS is responsible for calculating the HDHP and HSA limits and the Department of Health and Human Services calculates the ACA limits. 

The ACA out-of-pocket limit also differs from the HDHP out of pocket limit in that it requires that the self-only limit is “embedded” in the family maximum. This means that no one individual within a family can experience out of pocket expenses greater than the self-only limit (even if the family has not collectively reached the family out of pocket). The ACA out-of-pocket limitations for 2019 are below including the current limits for reference. 

 

2018

2019

Self-Only

$7,350

$7,900

Family

$14,700

$15,800

ACA Affordability Percentage
Health coverage is considered “affordable” for purposes of the ACA’s employer mandate pay or play penalty, as long as the cost of single coverage under the lowest cost plan option that provides minimum value doesn’t exceed 9.86% of the employee’s adjusted household income beginning in 2019. This is an increase from the current 2018 limit of 9.56% As a reminder, because employers cannot know an employee’s household income, they may choose to use one of three affordability safe harbors: Federal Poverty Level, Hourly Rate of Pay, or Box 1 W-2 Earnings.

The ACA’s affordability safe harbors are not one size fits all. The choice for each employer depends upon factors such as employer size, type of workforce, and current contribution strategy. If you have concerns about your current strategy, employers are permitted to change affordability safe harbor from year to year.


The 2019 Flexible Spending Account Limits have not been released yet. Be on the lookout for additional information later this year. If you have additional questions, please contact your HORAN representative.