IRS Makes Adjustments to 2018 Benefit Limits

The The Tax Cuts and Jobs Act legislated that cost of living increase 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 a decade of Employee Benefits experience specializing in all lines of health and welfare benefits, including Medical, Dental, Vision, Basic and Voluntary Life, Short and Long-Term Disability and Employee Assistance Programs. Her primary roles and responsibilities include carrier negotiations, strategic oversight, and educating HR staff and employees with regards to employee benefit packages and/or solutions.

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