HSA FAMILY CONTRIBUTION LIMIT CHANGES FOR 2018
March 7, 2018
This week, the IRS released a new Health Savings Account (HSA) contribution limit for families as part of Internal Revenue Bulletin: 2018-10. For 2018, the family contribution limit to an HSA was changed to $6,850 (plus $1,000 if the accountholder is making a catch-up contribution). That’s a $50 drop from the previously set family contribution limit of $6,900. The individual limit remains unchanged at $3,450.
The reduction in the HSA family contribution limit is in response to a change in how cost-of-living increases are calculated in the Tax Cuts and Jobs Act, which was signed into law in December. Clients and participants can take action to ensure that everyone is within compliance of the new HSA family limit.
What steps should participants take?
Participants contributing the maximum family contribution to their health savings accounts should reduce their 2018 contributions by $50 to ensure they do not exceed the $6,850 limit. HSAs allow for contribution changes mid-year, so it’s easy for participants to make the adjustment and stay in compliance.
Participants can also set up text and/or email alerts to be notified when they’re close to their contribution limit or have exceeded their contribution limit for the tax year by going to the “Statements and Notifications” tab of their online account and selecting “Update Notification Preferences.”
What steps should employers take?
Employers who offer a High-Deductible Health Plan (HDHP) and a health savings account should review their employees’ payroll elections and consider whether any employer contributions would put an employee above the family maximum.
If your payroll contributions and employer contributions are transmitted to Discovery Benefits via a vendor file or uploaded through a file in LEAP™, we also have the ability to configure your account to reject any amounts that put participants over the contribution maximum.
We’re in the process of updating our platforms to reflect the contribution limit change. To stay informed on all the latest regulatory updates that relate to benefits and COBRA, subscribe to our blog!