The Internal Revenue Service (IRS) recently released Revenue Procedure 2018-30. It announced inflation-adjusted amounts for 2019 for the maximum annual contribution to Health Savings Accounts (HSAs). It also announced the maximum out-of-pocket expense for High-Deductible Health Plans (HDHPs) for individual and family coverage.
The 2019 numbers are shown in the table below with notes about how they compare to the 2018 numbers.
|2019 Minimums and Maximums for HSAs* and HDHPs|
|Individual Coverage||Family Coverage|
|Maximum Annual HSA Contribution**||
|Minimum HDHP Deductible||
|Maximum HDHP Out-of-Pocket Expense***||
* HSAs, established by the Medicare Modernization Act (MMA) as of January 1, 2004, allow individuals or employers to contribute to an HSA as long as the individual is covered under an HDHP.
** Individuals age 55 or over can contribute an additional $1,000 to their HSAs.
*** The out-of-pocket expense does not include premiums.
On March 5, 2018 in Revenue Procedure 2018-18, the IRS reduced the maximum family contribution to $6,850 from the $6,900 maximum announced on May 4, 2017 in Revenue Procedure 2017-37. Subsequently, in Revenue Procedure 2018-27 released on April 26, 2018, the IRS reverted back to the $6,900 maximum family contribution in response to requests it received from plan sponsors.
As they prepare health plan offerings for their next open enrollment cycle, employers that offer HDHPs with HSAs will need to revise their plan design and documents to ensure compliance with 2019 amounts.
Employers considering an HSA need to look at both the HDHP design that they will offer and the amount that they will contribute to the accounts, if anything. However, implementing an HSA has become easier due to the maturity of the HSA market and deeper understanding of the regulations by the industry.
For plan sponsors with HDHPs, Sibson can help value the impact of plan design changes being considered based on these new limits. Plan sponsors interested in exploring an HSA should contact their Sibson consultant to determine whether that course of action is right for them. Employers should review both the benefits of an HDHP and the value of a HSA to their employees. If an HSA option is selected, a key consideration is how to communicate the HSA option, and whether or how much the employer should contribute to the account. Sibson can assist with both HDHP selection and HSA evaluation.
For more information about how these new numbers may affect your plan, please contact your Sibson consultant or the Sibson office nearest you.
Update is Sibson Consulting’s electronic newsletter summarizing compliance news. Update is for informational purposes only and should not be construed as legal advice. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.
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