HSA Headlines - 5/18/18 - HSA contribution limits grow for 2019
We're not even six months into 2018, and this has already been quite a confusing year for HSA users in regard to their contribution limits.
In early April, we covered the surprising news that HSA family contribution limits would be reduced for 2018 as a result of the GOP tax bill being passed through Congress. Because of a change in how the IRS calculates inflation, HSA contribution limits initially dropped by $50. This change came far enough into 2018 that those who set aside the full contribution for 2018 found themselves scrambling to try to avoid tax penalties.
Thankfully, in late April, the IRS announced Revenue Procedure 2018-27, which states that for 2018, taxpayers may treat $6,900 (rather than $6,850) as the maximum annual family HSA contribution. That just had to be the end of major HSA news for the next several months right?
Not so fast...
2019 HSA Limits Rise, IRS Says - Stephen Miller, Society for Human Resource Management (SHRM)
In an announcement that comes a bit earlier than expected, on Friday, the IRS announced Revenue Procedure 2018-30. This is the annual IRS announcement which provides the inflation-adjusted HSA contribution limits, along with minimum deductible and maximum out-of-pocket expenses for the high-deductible health plans (HDHPs).
For 2019, it's great news for HSA users who can now add $50 more to their accounts at the individual level and $100 to the family contribution limits. So the HSA contribution limits will be $3,500 for those participating in the HDHP as individuals, and $7,000 for those participating in the HDHP as two-person or family.
While there's no change in the high-deductible health plan (HDHP) minimum deductible (Self-only: $1,350, Family: $2,700 for an HSA-qualified plan), the maximum out-of-pocket went up $100 at the individual level and $200 at the family level to $6,750 and $13,500.
The Bottom Line on HSA Contribution Limits: These numbers may not sound like much, but since HSA balances can be carried over year to year, the differences could result in massive additional savings for those who can take advantage of it with increased annual contributions.
(And if you're curious how much you can save in an HSA, we've created an HSA Future Value Calculator to help you forecast just how much you can save for retirement based on your contributions and medical expenses.)
HSA Headlines is a weekly roundup of the latest, most relevant news and conversations about your health savings. It appears every Friday, exclusively on the HSA Learning Center. And for more about your physical and financial well-being, be sure to follow us on Facebook and Twitter.