Pig next to a stethoscope to show IRS Announces Change to 2018 HSA Family Contribution Limits

On March 5, 2018, the IRS released Revenue Procedure 2018-18 in Internal Revenue Bulletin 2018-10. Included in this Procedure is a reduction to the maximum contribution limit for Health Savings Account (HSA) contributions for calendar year 2018. The new limit for those with family coverage is $6,850. The previous limit had been set at $6,900. The maximum for self-only coverage did not change, and remains at $3,450 for 2018.

This change came as a result of the tax reform law (P.L. 115-97) that changed the annual inflation adjustment factor from the Consumer Price Index (CPI) to a new factor known as 'chained CPI'. The tax reform law changed the way in which the IRS calculates cost-of-living increases, and the HSA family contribution was changed as a result of the new process. Though benefit thresholds for additional benefit plans such as adoption assistance programs were also impacted, the annual limits for Medical Flexible Spending Account, Dependent Care Flexible Spending Account, and Commuter contributions were not impacted.

If you currently offer a Health Savings Account option, you will want to ensure that participant contributions for those with family coverage will be adjusted down to the new $6,850 limit for 2018. 

Please be sure to contact the Sentinel Benefits Health & Welfare Administration Team with any additional questions regarding this change.