Tax Reform Changes HSA Limit for Family Coverage

In Internal Revenue Bulletin 2018-10, the Internal Revenue Service (IRS) describes changes to the limit on health savings accounts (HSAs) as prescribed by the Tax Cuts and Jobs Act of 2017.  

For an individual with self-only coverage, nothing has changed since the IRS announced limits in 2017.

For calendar year 2018, the annual limitation on deductions under Internal Revenue Code Section 223(b)(2)(B) for an individual with family coverage under a high-deductible health plan is $6,850, down from $6,900.

A “high deductible health plan” is defined under Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed  $13,300 for family coverage. This definition has not changed since the IRS’ previous announcement.