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IRS Reduces HSA Family Coverage Contribution Limit for 2018, Effective Immediately

On March 5, 2018, the IRS issued Revenue Procedure 2018-18 (?Ç£Rev. Proc. 2018-18?Ç¥), which, among other things, reduced by $50 the maximum annual contribution that an employee who has elected family coverage under the employer?ÇÖs high deductible health plan (?Ç£HDHP?Ç¥) could make to his or her health savings account (?Ç£HSA?Ç¥) for 2018. Under the Internal Revenue Code, the applicable limits for HSAs are adjusted annually for any cost-of-living adjustments (?Ç£COLA?Ç¥). Prior to the recent enactment of the Tax Cuts and Jobs Act (H.R. 1) (the ?Ç£Tax Act?Ç¥), COLAs were based on the Consumer Price Index (?Ç£CPI?Ç¥). The Tax Act changed the basis of COLAs to instead use the Chained Consumer Price Index for All Urban Consumers (?Ç£C-CPI-U?Ç¥). The HSA family coverage contribution limit that was previously announced by the IRS for 2018 was $6,900, which reflected a CPI-based COLA. The revised limit, pursuant to Rev. Proc. 2018-18 and reflecting the… Continue Reading

March 2018
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