IRS Announces Reduction in Family HSA Contribution Limit for 2018

In Revenue Procedure 2018-18, the Internal Revenue Service announced a reduction in the HSA contribution limit for family coverage in 2018 to $6,850 from $6,900.  The self-only HSA contribution limit for 2018 remains unchanged at $3,450.

This change is a technical result of the Tax Cuts and Jobs Act, which adjusted the method for calculating inflation. Although the reduction may appear somewhat small, it may cause certain employees to inadvertently contribute over the limit.  For instance, an employee who front-loads his or her annual contribution may have already exceeded the new limit.

The IRS has not issued any transition relief for excess contributions made in 2018 by employees relying on the original contribution limit announced in Revenue Procedure 2017-37Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , , , ,

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Making a List, Checking it Twice – 2017

It’s that time of year when boys and girls start making their lists for the holidays, but we in the employee benefits world make a very different kind of list.  In the rapidly changing world of employee benefits and executive compensation law, checklists can be particularly helpful to make sure important issues do not fall through the cracks.  Each year we publish health and welfare, cost-of-living, executive compensation, and qualified retirement plan checklists to help individuals stay apprised of changes in the law, changes that they might need to make to their employee benefits plans, and various notice requirements.  We just published the last of our annual checklists.  Read More ›

Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , ,

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IRS Announces 2018 Cost of Living Adjustments

This post has been updated as of June 7, 2018, to reflect the revised maximum annual HSA contribution limit for family coverage set out in Revenue Procedures 2018-18 and 2018-27.

The IRS recently announced cost-of-living adjustments for 2018 in Notice 2017-64 and related guidance.  The key dollar limits for qualified retirement plans and health and welfare plans are noted below.

Qualified Retirement Plan Dollar Limits

  2017 2018
Limit on Section 401(k) deferrals (Section 402(g)) $18,000 $18,500
Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i)) $6,000 $6,000
Limit on deferrals for government and tax-exempt organization deferred compensation plans (Section 457(e)(15)) $18,000 $18,500
Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A)) $215,000 $220,000
Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A)) $54,000 $55,000
Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17)) $270,000 $275,000
Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000
Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i)) $175,000 $175,000
Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii)) $1,080,000 $1,105,000
SIMPLE retirement account limitation (Section 408(p)(2)(E)) $12,500 $12,500
Social Security Taxable Wage Base $127,200 $128,700

Health and Welfare Plan Dollar Limits

  2017 2018
Annual Cost Sharing Limit (self-only coverage) $7,150 $7,350
Annual Cost Sharing Limit (other than self-only coverage) $14,300 $14,700
HDHP Out-of-Pocket Maximum (self-only coverage) $6,550 $6,650
HDHP Out-of-Pocket Maximum (family coverage) $13,100 $13,300
Annual HDHP Deductible (self-only coverage) Not less than $1,300 Not less than $1,350
Annual HDHP Deductible (family coverage) Not less than $2,600 Not less than $2,700
Maximum Annual HSA Contributions (self-only coverage) $3,400 $3,450
Maximum Annual HSA Contributions (family coverage) $6,750 $6,900*
Maximum HSA Catch-Up Contribution $1,000 $1,000
Health Flexible Spending Account Maximum $2,600 $2,650

* The maximum annual HSA contribution for family coverage was reduced from $6,900 to $6,850 by Revenue Procedure 2018-18.  Read More ›

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IRS Announces 2017 Retirement Plan Dollar Limits

The IRS recently announced cost-of-living adjustments for 2017 in Notice 2016-62. The key dollar limits, along with last year’s limits, are noted below.

Maximum Qualified Retirement Plan Dollar Limits

  2016 2017
Limit on Section 401(k) deferrals (Section 402(g)) $18,000 $18,000
Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i)) $6,000 $6,000
Limit on deferrals for government and tax-exempt organization deferred compensation plans (Section 457(e)(15)) $18,000 $18,000
Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A)) $210,000 $215,000
Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A)) $53,000 $54,000
Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17)) $265,000 $270,000
Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000
Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i)) $170,000 $175,000
Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii)) $1,070,000 $1,080,000
SIMPLE retirement account limitation (Section 408(p)(2)(E)) $12,500 $12,500
Social Security Taxable Wage Base $118,500 $127,500

  Read More ›

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