HDHP and HSA Annual Limits Increase for 2019

The Internal Revenue Service (IRS) recently announced in Revenue Procedure 2018-30 that three of the annual limits affecting high deductible health plans (HDHPs) and health savings accounts (HSAs) will increase for calendar year 2019.

In order to maintain an HDHP's HSA-eligible status, an employer sponsoring an HSA-eligible HDHP in 2019 will need to ensure the HDHP's annual deductible is still at least $1,350 for self-only coverage and $2,700 for family coverage. These minimum deductibles have not changed from 2018.

The maximum annual out-of-pocket expense that can be incurred by a participant in an HDHP has increased for calendar year 2019 to $6,750 for self-only coverage (up from $6,650 for 2018) and $13,500 for family coverage (up from $13,300 for 2018). These limits apply to all deductibles, co-payments, coinsurance, and other out-of-pocket amounts on a combined basis, but they do not include premiums.

It is important for employers to keep in mind that maximum out-of-pocket expense limits also apply under the Patient Protection and Affordable Care Act of 2010 (PPACA) for all "non-grandfathered" employer-sponsored group health plans, even if the plans are not HDHPs. Thus, non-HDHPs may have out-of-pocket maximums in 2018 of $7,350 for self-only coverage and $14,700 for family coverage. The PPACA maximums for 2019 are $7,900 for self-only coverage and $15,800 for family coverage.

The maximum contribution an individual may make to an HSA has also increased. For calendar year 2019, the maximum annual HSA contribution limits are $3,500 for an individual with self-only coverage under an HDHP and $7,000 for an individual with family coverage under an HDHP. The contribution limits for calendar year 2018 were $3,450 and $6,900^*, respectively. The additional amount individuals who are age 55 or older may contribute is set by statute and remains at $1,000 for 2019.

^* The IRS previously reduced the 2018 annual HSA contribution limit for individuals with family coverage under an HDHP to $6,850, but later granted relief to allow the original $6,900 maximum to remain in effect for 2018.

For more information about these developments, please contact Audra Ferguson-Allen, Sarah Funke, Robert Gauss, Melissa Proffitt, Tara Sciscoe, Chris Sears, or the Ice Miller LLP employee benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.