Yesterday, the IRS released a bulletin that includes a change impacting contributions to Health Savings Accounts (HSAs).
- The family maximum HSA contribution limit has decreased from $6,900 to$6,850.
- This change is effective January 1, 2018 and for the entire 2018 calendar year.
- The self-only maximum HSA contribution limit has not changed.
- This means that current 2018 HSA contribution limits are $3,450 (self-only) and $6,850 (family).
Why is the change happening so abruptly?
The IRS continues to make adjustments to accommodate the new tax law that passed at the end of 2017. Tax reform updates require the IRS to implement a modified method of calculating inflation-adjusted or cost-of-living-adjusted limits for 2018. The IRS is now using a different index (Chained Consumer Price Index for All Urban Consumers) to calculate benefit-related inflationary adjustments.
Typically, the IRS adjusts the HSA limits for inflation on an annual basis about six months before the start of the impacted year. For example, the IRS established the 2018 limits in May 2017. Today’s bulletin supersedes those limits.
Resource:
• IRS Bulletin IRB 2018-10, March 5, 2018