Benefits Blog

Legislative Update: IRS Revises HSA Family Contribution Limit for 2018

Posted by Lindsay Barnard on Wednesday, March 07, 2018 @ 09:25 AM

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On Monday, the IRS released Bulletin 2018-10, which included a revision to the 2018 Family contribution limit for Health Savings Accounts (HSA).

Section 4 of the publication states that, effective immediately for the 2018 calendar year, the maximum amount that may be contributed to an HSA for account holders with Family coverage under an HDHP is now $6,850, a decrease from the previously established limit of $6,900. The limit for those with Individual coverage was unaffected, remaining at $3,450 for 2018.

This change was made in response to a provision passed in last year's tax reform bill, which altered the way in which the IRS calculates adjustments to benefit limits to account for annual inflation.

The 24HourFlex system has been updated as of Tuesday, March 6, 2018 with the new HSA limit and should be visible to employers and HSA participants now.

WHAT DOES THIS MEAN FOR HSA ACCOUNT-HOLDERS?

If you are an HSA account-holder with Family coverage, be sure to review your contributions for the year. If you have already contributed the previous maximum amount of $6,900, we recommend that you remove the $50 difference from your account, as any amount exceeding the new limit of $6,850 will be considered an excess contribution when you file your 2018 taxes.

HSA participants contributing to their account through standard per-pay deduction amounts may want to review the amounts that are scheduled to be deducted from their paycheck and work with their payroll department to make adjustments to meet the new, lower maximum.

TIPS FOR EMPLOYERS

Here are two things we recommend that employers do in response to this change:

1.
Pass this information along to your employees. This is especially important for participants who have already contributed the prior Family maximum of $6,900 to their HSA, as any amount that has been contributed over $6,850 will be considered an excess contribution. We will also be posting messaging about the change in participant portals for employees with HSAs.

2. Review your employees’ HSA per pay deduction amounts and adjust where needed. Participants who are on track to contribute the full annual amount may need to adjust their per pay deduction amounts to meet the new, lower limit. Please notify employees who may need per pay deduction amounts to be changed and make such changes in your payroll system.

3. Reach out to 24HourFlex for support. If you are a 24HourFlex client, please reach out to your assigned client relationship manager with questions. If you have a request for custom messaging or marketing materials regarding the change, just let us know. 

Topics: tax return, taxes, HSA, Health Savings Accounts, Education, employers, IRS, legislative updates, legislation, contribution, contribution limits, irs bulletin

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