IRS Makes Adjustments to 2018 Benefit Limits

The Tax Cuts and Jobs Act legislated that cost of living increases must use a Chained Consumer Price Index (CPI) to determine inflation adjustments like the HSA/FSA maximums.

This new method caused a recalculation on a number of cost of living increases for calendar year 2018.

On March 5, 2018, the IRS released changes effective this calendar year that need action.

The changes are as follows:

  1. The family HSA contribution for 2018 is reduced from $6,900 to $6,850.
  2. The maximum amount excluded from an employee’s gross income for qualified adoption expenses is reduced from $13,840 to $13,810.
  3. FSA maximums remain unchanged.

Actions Needed for Employers offering an HSA or Adoption Assistance Program

  • Employees (enrolled in HSA family coverage) need to be informed of the new reduced family limit for HSAs so adjustments can be made, if applicable.
  • Employees who have already contributed the HSA family maximum amount for 2018 will need to receive a refund of the excess contribution.
  • Repeat above if your company offers a qualified adoption assistance program.

If you have any questions, please contact me.

 

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Michelle Cammayo

About Michelle Cammayo

Michelle Cammayo has more than 13 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She also oversees the Compliance Department at Bolton & Company to ensure we are helping our clients manage and eliminate risk with regards to employee benefit compliance.

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