Gulfshore Insurance > Gulfshore Blog > Employee Benefits > IRS Lowers 2018 Family HSA Contribution Limit by $50

The IRS just announced that the 2018 HSA contribution limit for individuals with family coverage (which includes employee/spouse and employee/child[ren], as well as employee/family elections) under a high deductible health plan (HDHP) has been reduced from $6,900 to $6,850. The individual contribution limit remains unchanged at $3,450.

The IRS recalculated the limit because the Tax Cuts and Jobs Act that passed at the end of 2017 applies the so-called chained consumer price index (chained CPI) to increases in HSA and a few other employee benefit contribution limits.

Action Steps:
As an employer who offers one or more Qualified High Deductible Health Plans (QHDHPs) with the corresponding HSA contribution allowance, you should notify your employees of this reduction in the family HSA contribution limit, and advise them that adjustments in contributions for the remainder of 2018 may be needed. Employees may need to change their HSA elections going forward to comply with the new limit. Also, any individuals with family QHDHP coverage who may have already contributed $6,900 for 2018 must receive a refund of the excess contribution in order to avoid an excise tax.

Click here to read the Internal Revenue Bulletin.