HSA/HDHP Limits Increase for 2018

OVERVIEW

On May 5, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-37 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2018. The 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 all increased for 2018. The HSA contribution limits will increase effective Jan. 1, 2018, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2018.

ACTION STEPS

Because the cost-sharing limits for HDHPs will change in 2018, employers that sponsor these plans may need to make plan design changes for the 2018 plan year. Also, if an employer communicates HSA contribution limits to employees as part of the enrollment process, enrollment materials should be updated to reflect the increased limits for 2018.

HSA/HDHP Limits

The following chart shows the HSA/HDHP limits for 2018 as compared to 2017. 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.

Additionally - An employer may continue to impose its own health FSA limit, as long as it does not exceed the ACA’s maximum limit for the plan year. This means that an employer may continue to use the 2017 maximum limit for its 2018 plan year.