It’s hard to keep up with all the health care legislation news lately. That’s why we’re providing regular summaries of the latest news, reflecting the current state of health care in the United States or how it may be changing in the not-too-distant future. Here’s a recap of some of the latest stories:
On Monday, March 5, 2018 the IRS announced that the previously released maximum family contribution limit to a Health Savings Account (“HSA”) is reduced from $6,900 to $6,850 in 2018.
This change applies immediately and any family contribution to an HSA in 2018 over $6,850 could be subject to taxes and penalties.
The individual contribution limit for 2018 will remain $3,450.
Other HSA related limits, including the minimum deductible for an HSA-qualified high deductible health plan (HDHP), maximum out of pocket limits for HSA-qualified plans, and the post-age 55 contribution catch up limit, have not changed.
As stated in the same Internal Revenue Bulletin, a HDHP continues to be defined as a “health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage.”
HSA contribution limits are typically announced in early May for the following tax year and generally remain unchanged throughout the tax year. However, this HSA contribution change is a result of a provision in H.R. 1 (“Tax Reform”) that changed the way that inflation-related increases are calculated from the “Consumer Price Index” (CPI) to a new factor known as “chained CPI.”
While the change in the method of determining inflation-related increases also applies to Flexible Spending Accounts (“FSAs”) and Commuter or Transit Benefits, there does not appear to be an immediate impact on the previously announced limits for these plans in 2018.
For more information please see Bulletin No. 2018-10, containing Revenue Procedure (Rev. Proc.) 2018-18.
For specific guidance on how this impacts your plan, contact your ERISA attorney, broker, consultant, or tax and benefit expert.
Originally published by www.connectyourcare.com