On May 5, 2017, the IRS released Revenue Procedure 2017-37 which includes the 2018 inflation-adjusted amounts for health savings accounts (HSAs) and high deductible health plans (HDHPs). These limits include the maximum HSA contribution limit, the minimum deductible amount for HDHPs, and the maximum out-of-pocket expense limit for HDHPs. These limits vary based on whether an individual has self-only or family coverage under an HDHP. The IRS limits for HSA contributions and HDHP cost sharing will all increase for 2018. The HSA contribution limits will increase effective January 1, 2018, while the HDHP limits will increase effective for plan years beginning on or after January 1, 2018.
The HSA annual contribution limit for an individual with self-only HDHP coverage will increase by $50 to $3,450 for 2018. The annual contribution limit for an individual with family HDHP coverage will increase by $150 to $6,900.
With respect to HSA-compatible HDHPs, the minimum required deductibles will increase by $50 to $1,350 for self-only and by $100 to $2,700 for family coverage. (The deductible does not apply to certain preventive care services.) The 2018 maximum out-of-pocket expense limit will also increase to $6,650 for self-only and to $13,200 for family coverage.
The following table compares the 2017 and 2018 limits. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.
|
2017 |
2018 |
|||
|
Type of Limit |
Self-Only |
Family |
Self-Only |
Family |
|
$3,400 |
$6,750 |
$3,450 |
$6,900 |
|
$1,000 |
$1,000 |
$1,000 |
$1,000 |
|
$1,300 |
$2,600 |
$1,350 |
$2,700 |
|
$6,550 |
$13,100 |
$6,650 |
$13,300 |
Action steps
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, employers will need to update enrollment materials to reflect the increased limits that apply for 2018.
EPIC Employee Benefits Compliance Services
For further information on this or any other topics, please contact your EPIC benefits consulting team.
EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.