Piggy Bank next to thermometer and stethoscope showing the HSA contribution increase

On April 26, 2018, the IRS released Revenue Procedure 2018-27, which states that individuals with family-level coverage may contribute up to $6,900 (rather than $6,850) for 2018. As noted in a previous Sentinel Alert, the IRS had retroactively reduced the family-level HSA contribution maximum to $6,850 for 2018 as a follow up to the Tax Cuts and Jobs Bill and the way that cost-of-living changes are calculated. The change back to $6,900 in Revenue Procedure 2018-27 comes after industry stakeholders and advocates contacted the IRS and the Treasury Department requesting relief from the reduction in the maximum family HSA contribution limit.

Revenue Procedure 2018-27 also provides guidance on how to handle distributions from an HSA which were meant to reduce a contribution of $6,900 to the $6,850 contribution amount announced in Revenue Procedure 2018-18. The latest guidance states that an individual who has received a corrective distribution may (but is not required to) repay the contribution to the HSA up to the $6,900 amount.

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