IRS announces 2019 HSA limits

The annual limit on deductible contributions to a health savings account will jump by $50 for individuals and $100 for families next year, the IRS announced late last week.

For 2019, the annual limit on deductible contributions will be $3,500 for individuals with self-only coverage, a $50 increase from 2018, and $7,000 for family coverage, a $100 increase from 2018.

Meanwhile, the minimum deductible for a qualifying high-deductible health plan remains unchanged for 2019: $1,350 for individual coverage and $2,700 for family coverage.

IRS building - up angle.jpg
Internal Revenue Service federal building Washington DC USA

Annual out-of-pocket expenses will also increase in 2019: Deductibles, copayments and other amounts that do not include premiums will have a maximum limit of $6,750 for individual coverage next year, up $100 from 2018, and $13,500 for family coverage, up $200 from 2018.

Earlier this year, the IRS changed the family coverage contribution limit for 2018 for HSAs from $6,900 to $6,850 in response to the Tax Cuts and Jobs Act, but then reversed course and raised it again to $6,900.

HSA enrollment continues to grow, especially as employees look at the accounts as a way to save for medical expenses in retirement. High-deductible health plan and HSA enrollment reached 21 million members in 2017, according to research out last month from America’s Health Insurance Plans.

“We’re increasingly seeing HSAs function as a critical resource for Americans to fund their care today, tomorrow and in retirement,” says Harrison Stone, general counsel at ConnectYourCare, a health savings account provider. “Annual contribution limit increases allow HSAs to maintain their value and further grow their role as a key retirement planning building block.”

HSA contribution limits are updated annually to reflect cost-of-living adjustments. The increases are detailed in Revenue Procedure 2018-30 and take effect in January.

This article originally appeared in Employee Benefit News.
For reprint and licensing requests for this article, click here.
HSAs Healthcare costs Healthcare plans Healthcare guidelines IRS
MORE FROM EMPLOYEE BENEFIT NEWS