IRS Increases HSA/HDHP Limits for 2018

Compl Obs Header Alert_2016May 24, 2017

With IRS Rev Proc 2017-37, the IRS announced the new limits related to Health Savings Accounts (HSA) and High Deductible Health Plan (HDHP) for 2018.  These limits vary based on whether an individual has self-only or family coverage under an HDHP.

For 2018, the annual contribution limitation for a person with self-only coverage under a high-deductible health plan is $3,450, up from $3,400 in calendar year 2017.  The annual limit on deductible contributions for a person with family coverage under a high-deductible health plan will increase by $150 – from $6,750 in 2017 to $6,900 in 2018.

According to the IRS, an HDHP is defined under Section 223(c)(2)(A) 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.” Both of those amounts also increased from 2017’s limits.  Annual out-of-pocket expenses (OOP Maxes) – such as deductibles, copayments, and other amounts that do not include premiums – will have a maximum limit of $6,650 for individuals and $13,300 for families, which also increased from 2017’s limits.

Type of Limit

 2017

 2018

 Change

 HSA Contribution Limit

 Self-only

Family

$3,400

$6,750

 $3,450

$6,900

 Up $50

 Up $150

 HSA Catch-up Contributions

(not subject to adjustment for inflation)

 Age 55 or older  $1,000  $1,000  No change
 HDHP Minimum Deductible

 Self-only

Family

 $1,300

$2,600

 $1,350

$2,700

 Up $50

 Up $100

 HDHP Maximum Out-of-pocket Expense Limit

(deductibles, copayments and other amounts, but not premiums)

 Self-only

Family

 $6,550

$13,100

 $6,650

$13,300

 Up $100

 Up $200

Because the cost-sharing limits for HDHPs (minimum deductible and maximum out-of-pocket) will change for 2018, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2018. Also, if an employer communicates the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2018.

Source: Zywave

 

Please contact your AssuredPartners Benefits Team if you have questions or need assistance with this topic or other compliance matters

 

Information contained herein is for educational and/or informational purposes only.   The information provided may change over time as the laws and regulations change. This information is not, nor is it intended to be, legal advice and each employer or client should seek their own legal counsel for guidance regarding individual situations.

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