HSA contribution limits released for 2018
Every year, the IRS releases important figures related to health care plans and their various components. Issued on May 4, the guidance includes contribution limits for health savings accounts, as well as minimum deductibles and maximum out-of-pocket expenses for high-deductible health plans that HSAs must be paired with. The caps will go into effect for the 2018 calendar year.
Slight changes across the board
It's important for consumers enrolled in these types of benefits offerings to remain aware of the amount of money they must provide before health care coverage kicks in. Here's a handy chart that tracks the differences between 2017 and 2018 contribution limits, according to the Society for Human Resource Management:
HSA contribution limit
(Employer + employee)
|$3,450 for self-only coverage; $6,900 for family coverage||$3,400 for self-only coverage; $6,750 for family coverage||Increase of $50 for self-only coverage; increase of $150 for family coverage|
HSA catch-up contribution
(55 years and older)
|HDHP minimum deductible||$1,350 for self-only coverage; $2,700 for family coverage||$1,300 for self-only coverage; $2,600 for family coverage||Increase of $50 for self-only coverage; increase of $100 for family coverage|
HDHP maximum out-of-pocket amounts
(co-payments, deductibles, but not premiums)
|$6,650 for self-only coverage; $13,300 for family coverage||$6,550 for self-only coverage; $13,100 for family coverage||Increase of $100 for self-only coverage; increase of $200 for family coverage|
The 411 on HSAs
To enroll in a health savings account, people must first be participating in a high-deductible health plan. Other eligibility requirements include the inability to be claimed as a dependent on someone else's tax return for the year of HSA enrollment and lack of Medicare participation.
HSAs enable consumers and their employers to store tax-exempt money in funds to use for qualified medical expenses, such as dental and vision premiums, prescription drugs, Medicare Part A or Part B premiums and premiums under COBRA continuation coverage, among others.
"HSA contributions will stay with the owner until he or she uses them."
Contributions will stay with the owner of the HSA until he or she uses them. That means even after changing employers or leaving the workforce altogether, people will still have access to their funds.
HSAs under The American Health Care Act
Republican lawmakers recently proposed their amended version of the American Health Care Act to the U.S. House of Representatives. The legislation passed a vote and will now be reviewed by the Senate.
One of the elements of the AHCA, which is intended to replace the Obama administration's Affordable Care Act, was an expansion of HSAs. The bill nearly doubles the 2017 HSA contribution limit for family coverage – $6,750 – to $13,100 and also increases the catch-up limit from $1,000 to $2,000. In addition, the AHCA aims to enable the use of HSAs for over-the-counter medications. The bill also allows both spouses to make catch-up contributions and permit pre-HSA medical expenses to be reimbursed as long as the account is set up within 60 days of the particular cost disbursement, according to CNBC.
Senate lawmakers, even Republicans, have stated that they won't vote for the latest iteration of the AHCA as it currently stands. Many foresee a complete rewrite of the legislation that will incur more Democratic support. It's likely, however, that HSAs – in some form or another – will be present in the future bill as they are a favorite among Republican Congress members.