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IRS Restores 2018 HSA Limits and Announces 2019 HSA Limits

The Benefits of Health Savings Accounts (HSA's)In Rev. Proc. 2018-17, the IRS restored the previously issued $6,900 contribution limit for individuals with family HDHP coverage in 2018. The IRS had recently lowered the limit to $6,850 as a consequence of the Tax Cuts and Jobs Act, but due to stakeholder concerns, the IRS will now allow the original $6,900 limit for 2018. This IRS guidance also provides relief for individuals receiving distributions of excess contributions based on the reduced 2018 limit. Essentially, the IRS will allow these individuals to repay the distribution and treat it as resulting from a mistake of fact due to reasonable cause such that the distribution is not included in gross income and subject to additional taxes.

Additionally, in Rev. Proc. 2018-30, the IRS announced the HSA and HDHP limits for calendar year 2019. In accordance with this guidance, the 2019 HSA contribution limits are $3,500 for individuals with self-only HDHP coverage (up from $3,450 in 2018) and $7,000 for individuals with family HDHP coverage (up from $6,900 in 2018). The minimum deductibles for 2019 HDHP coverage remain unchanged from the 2018 calendar year, as they are $1,350 for self-only HDHP coverage and $2,700 for family HDHP coverage. Finally, the 2019 HDHP out-of-pocket limits for HDHP coverage are $6,750 for self-only HDHP coverage (up from $6,650 in 2018) and $13,500 for family HDHP coverage (up from $13,300 in 2018).

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