Business Transactions, Corporate and Real Estate

Health Savings Account Parameters for 2018

The Internal Revenue Service has announced 2018 cost of living adjustments for health savings accounts (HSAs) under current law.

For those with HSAs, a high deductible health plan must have a deductible of at least $1,350 (up from $1,300 in 2017) and total out of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) of not more than $6,650 (up from $6,550 in 2017) for single coverage or a deductible of at least $2,700 (up from $2,600 in 2017) and total out of pocket expenses of not more than ($13,300 ( up from $13,100 in 2017) for family coverage.  The maximum annual HSA contribution that may be deducted or excluded from income will be $3,450 for self only HSAs (up from $3,400 in 2017) or $6,900 (up from $6,750 in 2017) for family HSAs.  An additional $1,000 catch-up contribution may be deducted by taxpayers age 55 or older.

Unlike most inflation adjustments, which are published in the fall, the HSA adjustments are required to be published by June of the year prior to the year in which they take effect.

The proposed American Health Care Act (AHCA) passed by the House of Representatives yesterday would make a number of changes to the HSA regime, including increasing the maximum HSA contribution limits to equal the sum of the amount of the HSA deductible and out-of-pocket limitation ($8,000 for single coverage and $16,000 for family coverage using the above 2018 limitations) and liberalizing the catch-up contribution rules.  The AHCA is, of course, subject to change or rejection by the Senate.


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