2018 HSA Allowance Change

The IRS has decreased the Health Savings Account (HSA) Family Allowance contribution maximum.

Effective March 5, 2018 and in effect for the 2018 calendar year.

Why?  The IRS officially announced these changes when it published Internal Revenue Bulletin (IRB) 2018-10, which contains Revenue Procedure 2018-18. This change is a result of a provision in H.R. 1 (also known as the “Tax Cut and Jobs Act”) signed into law by President Trump on December 22, 2017 that changed the way inflation-related increases are calculated.

New Allowances:

Family Allowance contribution maximum is $6,850 for Under Age 55 and $7,850 for Over Age 55. 

Single Allowance contribution maximum remains $3,450 for Under Age 55 and $4,450 for Over Age 55.

Path In Edison to request HSA pledge change: Navigation Bar> HCM>Self Service>Benefits>HSA Contribution Change

  • State employees who are affected (see above) should log into Edison employee self-service and adjust their own payroll HSA contribution amounts so that their total HSA contribution plus the $500 seed funds from the state do not go over $6,850 for 2018.  If you contribute more than $6,850 in 2018 (including any state seed funds), you could now be subject to taxes and penalties on that overage next year when you calculate your taxes. For example, if you have family coverage in the CDHP and chose to contribute $6,400 out of your own paychecks in 2018 and the state seed funds of $500 were added to that, then your total contribution is $6,900.  You need to now reduce that $6,400 by at least $50, down to $6,350 in order to avoid any taxes or penalties next year when you file your 2018 tax return. Employees 55 and over may still contribute up to an additional $1,000 in “catch up” contributions.

 

  • Higher Education employees who are affected (see above) should contact their Human Resources departments and inquire how to adjust their own payroll contributions so that their total HSA contributions plus the $500 seed funds from the state do not go over $6,850 for 2018.  If you contribute more than $6,850 in 2018 (including any state seed funds), you could now be subject to taxes and penalties on that overage next year when you calculate your taxes. Employees 55 and over may still contribute up to an additional $1,000 in “catch up” contributions.

 

  •  Local Education employees who are affected (see above) should contact their Human Resources departments and inquire how to adjust their own payroll contributions so that their total HSA contributions plus any employer contributions (if applicable) do not go over $6,850 for 2018.  If you contribute more than $6,850 in 2018 (including any applicable employer contributions), you could now be subject to taxes and penalties on that overage next year when you calculate your taxes. Employees 55 and over may still contribute up to an additional $1,000 in “catch up” contributions.

 

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