Are You Prepared for The Changes Coming in 2018?
IRS increases contribution maximums for 2018 for HSAs, FSAs, commuter benefits programs, and more.
As you wrap up Q4 and get ready for Q1, are you preparing for the changes the IRS made to contribution limits for health savings accounts, flexible savings accounts, and commuter benefits programs? If not, it’s best to start preparing now. To start, take a look at the changes that will be implemented next year.
HSA Contribution Limits Rise
• Self-coverage contribution limits increase by $50
• Family-coverage contribution limits rise by $150
• No changes were made to the amount those 55 years and older are able to contribute to “catch up”
The IRS presented its inflation-adjusted contribution limits for next year. Those covering only themselves with an HSA will soon be able to contribute $3,450 per year compared to the $3,400 they were able to contribute this year. Family contributions will rise to $6,900 per year from $6,750.
Minimum deductibles are also set to rise. Individual HDHP deductibles will increase by $50, from $1,300 to $1,350. Family plan deductibles will increase by $100, from $2,600 to $2,700.
The most employees will be expected to pay for out-of-pocket expenses will increase by $100 for individuals and $200 for families. The 2018 maximum out-of-pocket amounts will be $6,650 (self-only) and $13,300 (family).
FSA Contribution Limits Rise
• FSA contribution limit increases by $50
Come 2018, workers will now be able to contribute up to $2,650 per year to a flexible spending account. This money can be used to help pay for qualifying medical, dental, and vision expenses as well as co-pays, prescriptions, over-the-counter medical supplies, and more. The increase also applies to limited FSAs.
Commuter Benefit Contribution Limits Rise
• Commuter benefit contribution limit increases by $5
As commuters ring in the New Year, they will also be ringing in the opportunity to contribute a few more dollars to their commuter benefit plan. The increase in maximum contribution brings the total employees can contribute to $260 per year.
Commuter benefit programs help both employers and employees save money when workers take mass transit, pay for parking, or carpool to the office. Contributions are made pre-tax and commuters save an average of 30% off their commute. The pre-tax contributions made to the commuter program reduce payroll taxes for the employer, saving them 7.65% on every dollar employees contribute to the plan.
Adoption Expenses Exclusion
• Increases from $13,570 to $13,840
QSEHRA (Qualified Small Employer Health Reimbursement Arrangement)
• Maximum reimbursement increases from $4,950 to $5,050 for single
• Maximum reimbursement increases from $10,050 to $10,250 for family
The QSEHRA is unique to employers with less than 50 employees. Employers who do not offer a group health plan can help employees manage healthcare costs through pre-tax contributions with the QSEHRA. This year’s increase benefits both individuals and families.
No Changes Made to Regular HRAs
While no changes were made to limits concerning HRAs, the three year phase in process was complete as of Jan 1, 2017. If you haven’t kept up with this or would like to learn more about health reimbursement account administration contact us today. Clarity is a full-service HRA company and can help you make smart decisions for your company and your employees.
These increases are advantages to employers and employees. So, make sure your employees know about them. If you haven’t started putting together marketing materials to share the news, start doing so now. Early marketing and information dissemination gives workers more time to process the changes and ask questions that could benefit your organization.