HSA Limits for 2018 Announced; Possible Changes Proposed

Last week the HSA limits for 2018 were released by the IRS.  Below is a summary of the increases for 2018 HSAs, along with proposed changes that could impact account holders.

2018 HSA Annual Contribution

Single:  $2,450

Family:  $6,900

2018 HSA Minimum Deductible

Single:  $1,350

Family:  $2,700

2018 HSA Maximum Out-of-Pocket Expenses

Single:  $6,650

Family:  $13,300

How Does an HSA Benefit You?

HSAs provide significant savings for families with three tax-saving opportunities:

1. Contributions are made with pre-tax dollars
2. Funds earn interest tax-free
3. Withdrawals for qualified eligible expenses are tax-free

HSAs also have long-term investment opportunities with tax benefits on contributions, earnings and distributions.

Learn more about Health Savings Accounts.

Looking Ahead

If the ACA replacement bill gets passed in the Senate, there could be more changes coming to HSAs.  Under the proposed American Health Care Act, HSAs would benefit with larger contribution caps and a reduction in the early withdrawal penalty for non-medical related items.  Currently, HSA holders face a 20% penalty if they withdraw funds prior to reaching age 65 for non-medical expenses.  Under this new bill, the penalty would go down to 10%.

P&A Group will continue to monitor this and will keep you informed of any new changes.