The 2018 health savings account (HSA) contribution, allowed for those enrolled in a high-deductible health plan (HDHP) other than self-only coverage, was lowered to $6,850 from $6,900. The change was announced in the IRS Internal Revenue Bulletin No. 2018-10. There was no change to the $3,450 HSA limit linked to self-only coverage.
The limit was recalculated in response to the Tax Cuts and Jobs Act that passed at the end of last year.
Historically, the IRS makes annual inflation adjustments to fringe benefit limits (e.g., HSAs, flexible spending accounts) based on the consumer price index (CPI). The recent tax changes now link the adjustment to the chained consumer price index (chained CPI), which will lower adjustments in future years.
Because of the change, employees contributing to an HSA should reduce their 2018 contributions accordingly. Employees who exceed the HSA limit, will be subject to a 6% excise tax if not corrected by the time of their 2018 federal tax filing.
For questions, contact your Bukaty benefits consultant at 913.345.0440.