IRS Announces Changes to 2018 HSA Family Contribution Limits

On Monday the IRS announced a reduction to the 2018 Health Savings Account (HSA) family contribution limit to $6,850 from the previously set amount of $6,900. This is a result of one of the provisions in last year’s Tax Cuts and Jobs Bill which changed the way the IRS calculates cost-of-living increases from using the Consumer Price Index (CPI) to using a ‘Chained CPI’.

What if I have already contributed the maximum to my HSA for 2018?

If you have already contributed the maximum amount to your Family HSA for 2018, this could mean that you may need to withdraw $50 and any related earnings from your HSA.  The withdrawal is taxable. If not withdrawn by April 15, 2019, the excess is also subject to IRS excise taxes.

Does this have any impact on other benefit limits (e.g, Individual HSAs, Flexible Spending Accounts, etc.)?

This change does not impact contribution limits for individual HSAs, Flexible Spending Accounts (FSAs), Commuter Reimbursement Accounts (CRAs) or Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs).

Below is a table of the 2018 HSA contribution limits in which the changes are reflected: