The IRS recently released the 2018 annual deduction limits for a Health Savings Account (HSA). Typically, these limits are adjusted each year for inflation. This is subject to any additional changes that become effective because of the proposed legislation modifying the Affordable Care Act.
The 2018 limits are $3,450 for an individual with self-only coverage and $6,900 for an individual with family coverage. Such deductible contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan.
A high-deductible health plan is defined as a plan with an annual deductible of $1,350 or more for self-only coverage or $2,700 or more for family coverage. The corresponding maximum out-of-pocket expenses are $6,550 and $13,100, respectively.
HSAs continue to be a powerful tool in combating the rise in health costs especially for young healthy people. Employers should continue to evaluate their effectiveness as part of an overall health benefits strategy.
If you have any questions, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301.231.6257.