21 Mar HSA Limit for Family Coverage Reduced by IRS
In March, the Internal Revenue Service (IRS) announced changes to certain tax limits for 2018, including a reduced contribution limit for health savings accounts (HSAs).
Based on this new index, the IRS lowered the HSA contribution limit for individuals with family coverage under a high deductible health plan (HDHP) from $6,900 to $6,850. This change is effective for the 2018 calendar year. The IRS’ other HSA and HDHP limits for 2018 remain the same.
Employers with HDHPs should inform employees about the reduced HSA contribution limit for family HDHP coverage. Employees may need to change their HSA elections going forward to comply with the new limit. Also, any individuals with family HDHP coverage who have already contributed $6,900 for 2018 must receive a refund of the excess contribution in order to avoid an excise tax.
Download our complimentary Compliance Bulletin for a complete overview of the how last year’s tax reform bill, called the Tax Cuts and Jobs Act, directly impacted the HSA contribution limit. Our Compliance Bulletin includes a chart showing the HSA/HDHP limits for 2018, as adjusted for the IRS’ recent guidance.
Have questions about HSA advantages or other Affordable Care Act (ACA) changes? Contact Barrow Group’s employee benefits experts to discuss selecting the right mix of employee benefits for your full-time employees and their dependent children. Click here to contact us or email us at firstname.lastname@example.org today.