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    IRS readjusts HSA contribution limit and announces 2019 limits

    In March of this year, the IRS adjusted the 2018 HSA contribution limit for individuals enrolled in family coverage down $50 from $6,900 to $6,850. A little over a month later, the IRS reconsidered the retroactive limit adjustment to the inflation-based calculation and allowed the $6,900 limit to remain for the entire 2018 tax year. The IRS also offered guidance (Rev. Proc 2018-27) for individuals who contributed above the limit and received a distribution. But the correction opportunity does not apply to pre-tax employer contributions for employees or employee contributions through a cafeteria plan.

    Employers should (again) confirm that they are using the correct contribution limits for HSAs and other welfare plans. Adjusting the HSA limit allows employees to take maximum advantage of the tax savings or corrections, if necessary, under the former lower rate.

    As a reminder, relevant plan limits for 2018 are below. Additionally, on May 10, 2018, the IRS announced the inflation-adjusted limits for 2019, which are also included below:

    HSA Limits

    Self-Only Coverage

    Family Coverage

    Annual contribution limit

    2018: $3,450
    2019: $3,500

    2018: $6,900
    2019: $7,000

    Catch-up contribution (age 55 and older)

    (same for 2018 and 2019)

    HDHP minimum deductible requirements

    (same for 2018 and 2019)

    (same for 2018 and 2019)

    HDHP out-of-pocket maximum

    2018: $6,650
    2019: $6,750

    2018: $13,300
    2019: $13,500

    Health FSA limit on pre-tax contributions


    Dependent care FSA tax exclusion

    married filing separately

    married filing jointly

    This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.

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