IRS Reverses Decision for 2018 Family Coverage HSA Limit
Note:Â This information was released late last week reversing our blogpost from March 19th.Â
The IRS released Revenue Procedure 2018-27 that allows health savings account (HSA) holders to treat $6,900 (rather than the previously announced in-year decrease to $6,850) as the maximum annual family HSA contribution limit for 2018.
In response to Revenue Procedure 2018-18, stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders noted that some individuals with family coverage under an HDHP (High Deductible Health Plan) made the maximum HSA contribution for the 2018 calendar year before the issuance of Rev. Proc. 2018-18 reducing the deduction limitation, and that many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit for an individual with family coverage under an HDHP. In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP.
For more information regarding Employee Benefits, Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP) 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 email@example.com.