IRS Releases 2019 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
In Rev. Proc. 2018-30, the IRS released the inflation adjusted amounts for 2019 relevant to HSAs and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.
2019 | 2018 | Change | |
| Annual HSA Contribution Limit (employer and employee) | Self-only: $3,500 Family: $7,000 | Self-only: $3,450 Family: $6,900* | Self-only: +$50 Family: +$100 |
| HSA catch-up contributions (age 55 or older) | $1,000 | $1,000 | No change |
| Minimum Annual HDHP Deductible | Self-only: $1,350 Family: $2,700 | Self-only: $1,350 Family: $2,700 | No change |
| Maximum Out-of-Pocket for HDHP (deductibles, co-payment & other amounts except premiums) | Self-only: $6,750 Family: $13,500 | Self-only: $6,650 Family: $13,300 | Self-only: +$100 Family: +$200 |
* After reducing the cap $50 in Rev. Proc. 2018-18 in March 2018 due to changes made by the Tax Cuts and Jobs Act, the IRS granted relief in Rev. Proc. 2018-27, restoring the limit back to the original 2018 level. We do not anticipate that the 2019 HSA annual family contribution limit will change as it did for this year.
Out-of-Pocket Limits Applicable to Non-Grandfathered Plans
The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2019.
2019 | 2018 | Change | |
| ACA Maximum Out-ofPocket | Self-only: $7,900 Family: $15,800 | Self-only: $7,350 Family: $14,700 | Self-only: +$550 Family: +$1,100 |
Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage, if the family out-of-pocket limit is above $7,900 (2019 plan years) or $7,350 (2018 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). A one-year extension of transition relief was recently announced extending the transition relief to policy years beginning on or before October 1, 2019, provided that all policies end by December 31, 2019.
Next Steps for Employers
As employers prepare for the 2019 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:
- HDHPs cannot have an embedded family deductible that is lower than the minimum HDHP family deductible of $2,700.
- The out-of-pocket maximum for family coverage for an HDHP cannot be higher than $13,500.
- All non-grandfathered plans (whether HDHP or non-HDHP) must cap out-of-pocket spending at $7,900 for any covered person. A family plan with an out-of-pocket maximum in excess of $7,900 can satisfy this rule by embedding an individual out-of-pocket maximum in the plan that is no higher than $7,900. This means that for the 2019 plan year, an HDHP subject to the ACA out-of-pocket limit rules may have a $6,750 (self-only)/$13,500 (family) out-of-pocket limit (and be HSA-compliant) so long as there is an embedded individual out-of-pocket limit in the family tier no greater than $7,900 (so that it is also ACA-compliant).
About the Author.
This alert was prepared for Clark & Lavey Benefits Solutions, by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Peter Marathas or Stacy Barrow at [email protected] or [email protected].
This alert was prepared by Stacy Barrow. Mr. Barrow is a nationally recognized expert on the Affordable Care Act and BAN’s Compliance Director. His firm, Marathas Barrow Weatherhead Lent LLP, is a premier employee benefits, executive compensation and employment law firm. He can be reached at [email protected].
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