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The IRS announced a change that lowers the 2018 maximum contribution amount to an HSA for participants covered by an HSA qualified High Deductible Health Plan (HDHP). A provision in the tax reform bill enacted last year, the Tax Cuts and Jobs Bill, changed the way the IRS calculates cost-of-living increases. On 3/5/18, the IRS released Revenue Procedure 2018-18 in Internal Revenue Bulletin 2018-10 which provides what these new recalculated limitations are.
Of importance to DBS clients is a reduction in the maximum family HSA contribution for those with family coverage under a qualified HDHP from $6,900 (as previously announced in Rev. Proc. 2017-37 on May 4, 2017) to a new limit of $6,850. Some participants may need to lower their 2018 HSA elections. The contribution maximum for single coverage was left intact at $3,450.