Compliance Bulletin:  Employee Benefit Plan Limits for 2019.  Read more here.

IRS Announcements for 2019 – HSA Limits and ACA Affordability Percentage Increases

June 21, 2018

The IRS has recently issued two (2) announcements regarding increases in 2019 – HSA (Health Savings Account) Limits and the ACA (Affordable Care Act) Affordability Percentage.  Both increases are effective January 1, 2019.

2019 HSA Limits:  Contributions & Maximum out-of-pocket expense

Health savings account (HSA) contributions will increase for 2019, as well as the high deductible health plan (HDHP) maximum out-of-pocket limits.  The limits vary based on whether an individual’s coverage is self-only or family under their HDHP.  Below are the 2019 limits with the change noted in parenthesis:

  • 2019 HSA Contributions
    • Family – $7,000 (up $100)
    • Self-only – $3,500 (up $50)
  • 2019 HSA Catch-up Contributions
    • Age 55+ – $1,000 (no change)
  • 2019 HDHP Minimum Deductible
    • Family – $2,700 (no change)
    • Self-only – $1,350 (no change)
  • 2019 HDHP Maximum Out-of-pocket Expense Limit (Deductible, copayments and other amounts, but not premiums)
    • Family – $13,500 (up $200)
    • Self-only – $6,750 (up $100)

For employers who sponsor HDHP plans – due to the changes in cost-sharing limits, there may need to be plan design changes for plan years beginning in 2019.  Keep in mind, as the employer, if you are communicating the 2019 HSA limits to your employees during the enrollment process, be mindful that all enrollment materials (digital and/or print) are also updated to reflect the 2019 limit increases that go into effect on January 1, 2019.

2019 ACA Affordability Percentages Increase

The IRS also issued a Revenue Procedure to index the contribution percentages used to determine the affordability of an employer’s plan under the ACA (Affordable Care Act). The increase is effective beginning January 1, 2019 (for both taxable and plan years that begin 1/1/2019) and shows a significant increase from 2018.

For some employers it is important to note the increase may offer additional flexibility in respect to employee contributions for 2019 to meet the adjusted percentage.

2019 Affordability Percentages

  • 86 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility
  • 3 percent of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance)

The adjustment means the employer-sponsored coverage for the 2019 plan year will be considered affordable under the employer shared responsibility rules if the employee’s required contribution for self-only coverage does not exceed 9.86% of the employee’s household income for the tax year.

For comparison, the 2018 affordability percentage for the pay or play rules and premium tax credit eligibility was 9.56%.  The 2018 percentage for the individual mandate exemption was 8.05%.

For more information regarding Employee Benefits, Health Savings Accounts and High Deductible Health Plans for your business or organization, or to speak with one of our advisors, email Jason Della Penna, Senior Vice President at Brown & Brown Benefit Advisors at jdellapenna@advisorsbb.com.


Brown & Brown Benefit Advisors