On March 5, 2018, the IRS announced that for 2018, the maximum contribution an individual may make to a health savings account (“HSA”) based on enrollment in family coverage is $6,850. This marks a decrease from the $6,900 maximum that the IRS had previously announced as the limit.
The reason for this decrease is that the new tax law contains a provision that changes the way inflation adjustments are made for, among other things, HSA contributions. Fortunately, the only impact for 2018 is on the HSA contribution limit for family coverage; all other limits (including deductibles and out-of-pocket maximum limits for HSA-compatible plans and the HSA contribution limit based on enrollment in self-only coverage) remain unchanged.
Employers that allow employees to make salary reduction contributions to an HSA should take swift action to prevent employees from contributing more than $6,850 (or $7,850 for employees who will be 55 or older at the end of 2018 and thus entitled to make a $1,000 “catch-up” contribution). It is not clear from existing IRS guidance whether employers have any obligations to take action if employees have, relying on the earlier IRS announcement, already contributed $6,900 to their HSAs in 2018 through salary reductions. IRS guidance on this issue would be welcome.