HSA Limits: Overview
On May 5th, the IRS released its new inflation adjusted contribution limits for HSA’s. HSA limits are the total amount an individual or family can contribute to their HSA’s. Both individuals and families are eligible for HSA’s, but the contribution limits differ. Every year, the IRS releases new limits based on inflation calculations. Because of the nature of the HSA’s, these new limits are an attempt to make sure that HSA’s remain viable and keep pace with inflation. Because of the tax-deferred nature of the HSA’s, these limits exist so that individuals do not abuse the HSA. As always, HSA funds must be used to cover qualified medical expenses. Further, alongside the increase to HSA contribution limits are increases to minimum deductibles on high-deductible health plans and out-pocket-maximums.
2018 HSA Limits
For 2018, the new contribution limits are as follows. Those who are enrolled in individual plan are able to contribute up to $3,450 to their HSA, while those who are enrolled in family plans can contribute up to $6,900. Those who are over the age of 55 are still able to make catch-up contributions of up to $1,000 per year. There is no inflation adjustment for these catch-up contributions. They have not changed since the first HSA’s.
Starting in 2018, HDHP plans have new guidelines. The minimum deductible for an HDHP is now $1,350 for individual plans and $2,700 for family plans. The deductible on the HSA is the amount of money that a covered individual must pay out of pocket before the insurance covers the costs. Along with this increase, out-of-pocket maximums for HDHP plans have increased. For 2018, the individual out of pocket maximum is now $6,650. For families, it is $13,300. This is the maximum amount of money that the covered individual can pay for medical expenses per year. These adjustments are effective on all plans starting January 1st, 2018.
New HSA limits are a regular aspect of the changing health care industry. If the ACA stays in place, we can expect new limits yearly. Because of this, we recommend keeping on eye on current legislation that may change this. We have written about the new health care bill here. As always, if you have questions please shoot us a message at firstname.lastname@example.org, or call us at 612-492-9320.