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News Items, by Subject

Health savings accounts (HSAs)

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Health Savings Account Participants Are Healthcare's Savviest Consumers
"HSA participants are: ... [1] 38 percent more confident they understand their health insurance coverage and 54 percent more confident in forecasting out-of-pocket healthcare costs.... [2] 23 percent more likely to make cost/value-based decisions than the general population....[3] 46 percent more likely to research and compare costs and 37 percent more likely to seek out alternatives.... [4] 68 percent more likely to have a savings goal and 80 percent more likely to be saving aggressively for future healthcare savings." (Alegeus Technologies)
Ways and Means Reports Out Eleven Health Care Bills After a Two-Day Markup
"The bills reported out of the Ways and Means Committee ... deal with the following topics. [1] Delay of the implementation of the Cadillac Tax.... [2] Broadening of Qualified Medical Expense definition.... [3] Increase HSA contribution limits.... [4] Expand eligibility for HSAs ... [5] HSA 'housekeeping' issues.... [6] Modification of the ACA premium tax credit." (Employers Council on Flexible Compensation [ECFC])
[Opinion] Ways and Means Bills Would Expand HSA Tax Breaks, Weaken Insurance Marketplaces
"The House Ways and Means Committee is marking up several bills this week that would raise contribution limits for [HSAs] and expand the allowable uses of these accounts, at a cost of $41 billion over ten years ... The bills also include other problematic provisions providing premium tax credits to people who buy plans offered outside the [ACA] marketplaces and delaying the ACA's excise tax on high-cost plans ... In all, the bills would cost $92 billion over the next decade[.]" (Center on Budget and Policy Priorities)
HSA Eligibility for Retirement-Age Individuals
"[W]hen an individual who is 65 commences Social Security benefits, that individual is automatically enrolled in Medicare Part A.... [O]nce an employee or spouse is enrolled in Medicare Part A, they are no longer eligible to make contributions to an HSA. To complicate the contribution calculation, in the year an employee turns age 65 and commences Social Security benefits, enrollment in Medicare Part A will apply retroactively up to six months." (Benefits Bryan Cave)
House Committee Considers HDHP/HSA Enhancements (PDF)
"[T]he House Ways and Means Committee's Subcommittee on Health held a hearing focusing on ways to improve access to and increase flexibility in establishing HSA-compatible, high-deductible health plans. While Congress is not likely to act on these proposals before mid-term elections in the fall, they could ultimately propel future legislation on this topic." (Conduent)
Using Your Health Savings Account
"You are not required to take funds out of your HSA at the time that a qualified expense occurs. You can leave that money in your HSA and, as long as you keep your receipts showing that you paid for those qualified expenses, you can wait to reimburse yourself for that expense at any time in the future, even if you are no longer covered by an HDHP when you decide to reimburse yourself." (United Benefit Advisors)
The New Rx for Retirement: Maximizing Retirement and Health Savings (PDF)
16 pages. "[This paper] presents a savings optimization model to help determine how to allocate funds between retirement plans and HSAs for maximum spending power in retirement.... [1] The relevance of HSAs; [2] The retirement savings optimization model; [3] The savings optimization model in action; [4] Putting it all together." (Great-West Financial and Empower Retirement)
Mercer and American Benefits Council Testimony to House Subcommittee Hearing on Consumer-Directed Health Plans (PDF)
25 pages. "Approximately 34% of covered employees working for large employers (those with 500 or more employees) were enrolled in a CDHP in 2017, ... [a] 325% increase since 2009.... HSA-eligible plans save about 20% on plan costs when compared to PPO plans and are 6% less costly than PPO plans with deductibles over $1,000.... [T]he success of HSA-eligible plans in reducing plan costs is one of the few strategies proven to help 'bend the cost curve' and, in turn, help manage premium costs for employees[.]" (American Benefits Council)
The HSA in Your Future: Defined Contribution Retiree Medical
"The HSA's tax preferences coupled with current and future use options may make it more valuable to workers than contributing a similar amount of take home pay to a 401(k) or 403(b) ... Only a minority of workers have access to an HSA-qualifying health option. Only a subset of those eligible actually select the HSA-capable option. Even fewer who select that option contribute to the HSA. And, only a miniscule minority of those who contribute invest HSA assets." (Plan Sponsor Council of America [PSCA])
[Opinion] ECFC Statement Submitted to House Subcommittee Hearing on Consumer-Directed Health Plans (PDF)
"Congress should take steps to stop the impact of the Cadillac Tax on consumer-directed health plans.... If full repeal of the excise tax is not feasible, we would advocate that employee contributions to FSAs and HSAs be exempted from the calculation of the Cadillac Tax or any direct limitation that may be proposed on employer-provided coverage." (Employers Council on Flexible Compensation [ECFC])
Chairman's Statement at Hearing: Lowering Costs and Expanding Access to Health Care Through Consumer-Directed Health Plans
"Engaging consumers in their health care spending is critical to reining in our system's ever-increasing costs. [Health Savings Accounts (HSAs)] continue to increase in popularity, now covering more than 21.8 million Americans.... [W]itnesses will tell us about the barriers employers and individuals face when trying to offer or enroll in an HSA-qualified plan. Finally, we will examine the various reform ideas, including many authored by members of this subcommittee, that are aimed at expanding access to HSAs." (Committee on Ways and Means, U.S. House of Representatives)
Is Investing in an HSA a Good Idea?
"The long-running bull market is making it more tempting than ever for clients to try and realize long-term, tax-free earnings growth within HSA accounts. That strategy can often make sense, say financial professionals, but financial advisors should make sure clients fully understand their range of options." (Financial Planning)
Reasons to Integrate Health Savings Into Your Retirement Plan Offering
"[1] Health Savings Accounts address concerns about future costs ... [2] Health Savings [Accounts] are triple tax-free now and in retirement ... [3] HSAs can be easily integrated into an existing plan ... [4] Health Savings Accounts can boost employee recruiting and retention." (Bronfman Rothschild)
SEC Issues Investor Bulletin for HSAs
"[The May 18, 2018] Investor Bulletin was [the SEC's] attempt to explain how HSAs operate and outline what people should be aware of when they make contributions to an HSA. Investor Bulletins are neither legal interpretations nor statements of SEC policy." (Employers Council on Flexible Compensation [ECFC])
HSAs: Untapped for Retirement
"Beyond today's benefits, HSAs can be used for medical expenses in retirement.... Those costs are projected to soar for retirees, requiring up to 59 percent of what a couple receives from Social Security. While the potential benefits may inspire investors to save with their HSAs, there are also a few drawbacks." (American Century Investments)
HSAs and Medicare: Like Oil and Water
"Being enrolled in any part of Medicare, including the usually free Part A, leaves taxpayers ineligible for deposits into an HSA.... Many choose to defer their enrollment into Medicare so they can keep taking advantage of HSA tax benefits. And this can be done without penalty as long as the member is covered under a qualified HDHP plan as a result of their own (or their spouse's) active employment through an employer of 20 or more employees.... Most people don't know that when you sign up to collect Social Security retirement income, you're automatically enrolled in Medicare Part A." (Frenkel Benefits)
HSA + Medicare: Using an HSA to Pay for Medicare Premiums and More
"You can still use your HSA funds if you have Medicare coverage. You may withdraw funds from your HSA at any time, regardless of whether you are eligible to contribute to your HSA.... [Y]ou may not contribute to an HSA while enrolled in Medicare.... By choosing to postpone enrollment in Medicare, you are still eligible to make contributions to your HSA until the first day of enrollment." (Connect Your Care)
[Guidance Overview] IRS Announces 2019 HSA Limits
"The HDHP out-of-pocket maximum includes in-network deductibles, copayments and coinsurance, but does not include premiums or balance-billing for out-of-network services.... Employers are advised to begin updating payroll and plan administration systems to reflect the 2019 cost-of-living adjustments.... [E]mployers should incorporate the 2019 HSA limits into all relevant participant communications[.]" (The Wagner Law Group)
[Guidance Overview] IRS Announces HSA and HDHP Limitations for 2019
"Note that the [ACA] also applies an out-of-pocket maximum on expenditures for essential health benefits.... [T]he HDHP and ACA out-of-pocket maximums differ ... First, ACA out-of-pocket maximums are higher than the maximums for HDHPs.... Second, the ACA requires that the family out-of-pocket maximum include 'embedded' self-only maximums on essential health benefits." (Proskauer's ERISA Practice Center)
[Guidance Overview] IRS Releases 2019 Inflation Adjusted Amounts for HSAs
"IRS Revenue Procedure 2018-30 increases the 2019 calendar year HSA contribution limit for individual coverage to $3,500. The limit for family coverage will be $7,000 ... California AB 1305 requires fully insured California family HDHP policies to have an embedded individual deductible that is no greater than the policy's individual deductible.... [B]ecause the minimum HDHP deductible will remain the same, no change is needed for 2019 to the embedded individual deductible on the family HDHP if it is currently set at $2,700 or higher." (ABD Insurance & Financial Services)
[Official Guidance] Text of IRS Rev. Proc. 2018-30: 2019 Inflation Adjusted Amounts for Health Savings Accounts (HSAs) (PDF)
"For calendar year 2019, the annual limitation on deductions ... for an individual with self-only coverage under a high deductible health plan is $3,500 [and] the annual limitation on deductions ... for an individual with family coverage under a high deductible health plan is $7,000.... For calendar year 2019, a 'high deductible health plan' is ... a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,750 for self-only coverage or $13,500 for family coverage." (Internal Revenue Service [IRS])
When It Comes to HSA Plan Enrollment, Intention Is Everything
"[E]mployers that position the HSA as the core plan achieved more than double the average enrollment of other employers in 2017: 52% compared with 25%.... [T]his is based on plans offered for three or more years, and from 2015 to 2017 enrollment also grew faster in the group of core plans, from 39% to 52%, while it grew only from 19% to 25% in the plans not considered core." (Mercer)
[Guidance Overview] HSA Family Limit Reverts Back to $6,900
"If you (or your payroll vendor) reprogrammed your payroll systems to reflect the $50 limit cut, you can now undo that and go back to $6,900. Before automatically adjusting employee elections, you should make sure that employees have not made other changes to their elections." (HUB International)
[Guidance Overview] IRS Announces HSA Relief
"The restoration of the $6,900 limit will be welcome news to employers whose health plans contain an HSA. Employers may -- but are not required to -- allow employees to repay any distribution made on the assumption that the reduced limit would apply. Regardless of whether an employee repays that amount, the guidance provides that HSA rules will not cause the employee to be taxed on the amount of the distribution." (Ballard Spahr LLP)
Rethinking Your Organization's Health Care Plan? Consider These Factors in Consumer Health Care
"If you are offering CDHPs to your employees, you need to consider offering tax-advantaged benefits. They provide a means of financing out-of-pocket health care costs and help many Americans afford critical health care expenses. For nonprofit organizations, it's often difficult to compete with for-profits when it comes to employee benefits -- affordable health care, in particular. These tax-advantaged accounts help your organization manage the cost of health care as an employer while helping employees do the same." (Martin Trussell, in Forbes)
[Guidance Overview] IRS Provides Relief for HSA Family Limit
"[The IRS] acknowledged that the costs of modifying systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution (and earnings) (which in some cases exceeded $50), would be significantly greater than any tax benefit associated with an unreduced HSA contribution. [Rev. Proc. 2018-27] also provides guidance for individuals who may have already taken a distribution from their HSA in 2018 based on the earlier published maximum limit of $6,850." (Winston & Strawn LLP)
[Guidance Overview] IRS IR 2018-107: Relief for Taxpayers Affected by Reduction of Maximum Deductible Health Savings Account Contribution (PDF)
"A change in the inflation adjustment calculations for 2018 under the Tax Cuts and Jobs Act reduced the maximum deductible HSA contribution for taxpayers with family coverage under an HDHP by $50, to $6,850. Revenue Procedure 2018-27 announces this relief for affected taxpayers and allows the $6,900 limitation to remain in effect for 2018[.]" (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Rev. Proc. 2018-27: Adjustment to Annual Limit for HSA Contributions for 2018 (PDF)
"This revenue procedure modifies the annual limitation on deductions for contributions to Health Savings Accounts (HSAs) allowed for individuals with family coverage under a high deductible health plan (HDHP) for calendar year 2018 announced in Revenue Procedure 2018-18 ... For 2018, taxpayers may treat $6,900 as the annual limitation on the deduction for an individual with family coverage under an HDHP pursuant to section 223(b)(2)(B) of the Internal Revenue Code. This revenue procedure makes no other changes to Rev. Proc. 2018-18." (Internal Revenue Service [IRS])
Ideas for Funding Your HSA
"Currently, you cannot transfer money from a 401(k), 457 or other type of retirement plan. However, if you have a 401(k) from a former employer, you may be able to roll those funds into a traditional IRA and then transfer it to your HSA. You can also transfer funds from a SEP (self-employed plan) or Simple IRA as long as the plan is no longer considered ongoing." (DataPath)
Handling Common Errors under Employer-Sponsored HSA Programs
"Correction of errors under an HSA program depends on the nature of the error.... Employee was never eligible to establish an HSA ... Employee maintains an HSA and ceases to be eligible during the testing period ... Correcting excess contributions without 6-percent penalty ... Correcting excess contribution with 6-percent penalty." (Thompson Coburn)
[Official Guidance] List of IRS-Approved Nonbank Trustees as of April 1, 2018 (PDF)
An entity that is not a bank (or an insurance company in the case of Archer Medical Savings Accounts and health savings accounts) can request to be a nonbank trustee/custodian by applying in writing and demonstrating that certain requirements will be met in order to handle any of the following fiduciary accounts: [1] Archer Medical Savings Account (MSA); [2] Health Savings Account; [3] Qualified Retirement Plan Custodial Account; [4] 403(b)(7) Custodial Account; [5] Individual Retirement Arrangement (IRA); [6] Roth IRA; [7] Deferred Compensation Plan of State & Local Government and Tax Exempt Organizations; [8] Custodial Accounts Coverdell Education Savings Account. [More information is on an IRS web page.] (Internal Revenue Service [IRS])
IRS Retroactively Reduces HSA Contribution Limit; Transition Relief May Follow
"In mid-March, two members of the House Ways and Means Committee ... wrote to Treasury Secretary Steven Mnuchin, identifying burdens the mid-year limit change inflicts on employees and employers and requesting a delay until 2019 of enforcement of the new contribution limit.... [T]he American Benefits Council ... likewise sought an enforcement delay or similar transition relief from Treasury and the IRS. Treasury and the IRS have acknowledged [these] concerns ... and expedited their consideration of potential transition relief." (Seyfarth Shaw LLP)
Interaction of Health FSAs and Health Savings Accounts (PDF)
"This article explains how Health FSAs and HSAs work together and provides answers to some common questions posed by employers with respect to the complex interaction between these two consumer-driven benefit designs." (EPIC)
HSA Changes May Be on the Way
"Key provisions of the [Bipartisan HSA Improvement Act include:] ... [1] Allows HSA-qualified plans to offer pre-deductible coverage of health services at onsite employee clinics and retail health clinics; [2] Permits HSA-qualified plans to offer pre-deductible coverage for services and medications that manage chronic conditions; [3] Permits the use of HSA dollars toward wellness benefits and includes exercise and other expenses associated with physical activity; [4] Clarifies that the employer can offer excepted benefits, like telehealth, and second opinion services to employees with HSA-qualified plans; [5] Allows for spousal FSA benefits to be used simultaneously with HSA-qualified plans." (Hill, Chesson & Woody)
HSA Eligibility Unaffected by Insured HDHP First-Dollar Coverage of Male Sterilization Until 2020
"Because male contraceptives are not considered preventive care under IRS rules, [state] laws could potentially affect the HSA eligibility of individuals covered under high-deductible health plans (HDHPs) subject to those mandates. The IRS recently provided transitional relief, until 2020, for individuals enrolled in plans that would otherwise qualify as HSA-compatible HDHPs except that they provide for coverage of male sterilization or male contraceptives before the deductible is satisfied." (Conduent)
IRS Reduces 2018 Limits for HSAs, Adoption Assistance Programs
"Using the chained CPI also will lower the threshold for the so-called Cadillac tax ... the cap on salary reduction contributions to health flexible spending accounts (health FSAs) and transit benefits. However, Rev. Proc. 2018-18 does not address those limits." (Willis Towers Watson)
[Guidance Overview] IRS: Male Sterilization and Contraceptives Are Not an HSA Preventive Care Service
"[E]mployees who enrolled in HDHPs that are required to cover these services would not be eligible to contribute to an HSA. Doing so would make them subject to excess contribution penalties.... The mere fact that the plan covers these items and services is enough." (HUB International)
[Opinion] ECFC Letter to IRS Requesting Guidance for Application of Revised HSA Contribution Limits (PDF)
"Application of the current rules regarding excess contributions is administratively complex.... In the current situation where individuals made contributions based on guidance issued by the IRS that was revoked when new tax legislation was enacted, there seems to be no reason to impose the detailed excess contribution regime on individuals and those who administer HSA trusts and custodial accounts." (Employers Council on Flexible Compensation [ECFC])
[Opinion] ERIC and Broad Coalition Push Health Savings Account Reforms for Omnibus
"ERIC and other coalition members have released a budget estimate showing that these HSA fixes would have only a nominal impact on the federal budget -- thus eliminating one of the primary objections that could have prevented these needed reforms and modernization provisions from being included in the coming omnibus spending package.... The package of reforms are individual bills that have been aggregated, in part, into H.R. 5138 ... Also part of the package is H.R. 365[.]" (The ERISA Industry Committee [ERIC])
Bill to Improve HSAs Would Permit Pre-Deductible Coverage of Preventive Care
"The Bipartisan HSA Improvement Act [would] ... [1] Clarify that certain services and prescription drugs that prevent chronic disease progression are preventive care that will not be subject to a deductible; [2] Allow employers to provide primary care, chronic disease prevention, and other high-value services at on-site and near-site medical clinics without imposing a deductible; [3] Permit the use of HSA funds to pay for medical expenses for adult children up to age 26; and [4] Permit HSA contributions if a spouse has a health FSA." (Wolters Kluwer Law & Business)
Only Half of Americans Feel Knowledgeable About Health Savings Accounts
"[M]any Americans are unaware that they can use their HSA assets -- accumulated in their working years -- to pay for health care and long-term care expenses in retirement.... 2 in 5 Americans mistakenly believe that balances must be spent by the end of the year, or forfeited.... Nine in ten advisors surveyed say they typically discuss healthcare or long-term care with clients but only 7 in 10 have specifically addressed the use of an HSA." (LIMRA)
Issues for Plan Sponsors and Fiduciaries to Follow
"Fiduciary regulation may be substantially on hold, but other regulators are on the move ... Tax reform's impact on Schedule C reporting for expenses in 2018 ... DOJ memo to U.S. Attorneys regarding guidance policy in litigation has implications for health and retirement plans ... SCOTUS again considers claim of lifetime retiree medical benefits ... Short term limited duration insurance proposal ... Vasectomy or male contraception benefit disqualifies from HDHP status ... HSA contribution limit dropped for 2018." (Winstead PC)
Should You Transfer Money from an IRA to an HSA?
"[T]ransferring money from an IRA to an HSA will be of limited value, except in a small handful of cases. Most other IRA owners should leave their IRA assets intact and fund their HSAs with non-IRA dollars, the better to maximize contributions to both account types and take advantage of tax-sheltered savings." (Morningstar Advisor)
[Guidance Overview] Male Contraceptive Laws May Create HSA Problems for Employers in Certain States
"Illinois, Maryland, and Oregon have each enacted laws that require insurers to cover male sterilization or male contraceptives without a deductible.... [A]ny plan that complies with those state law mandates regarding male contraception would fail to be an HDHP and any individual covered by such a plan would not be eligible to make or receive tax-favored HSA contributions.... Notice 2018-12 allows for transition relief." (Ogletree Deakins)
IRS Issues Transition Rule for HSA-Incompatible Vasectomies
"When a Maryland statute took effect Jan. 1 requiring all state-regulated health plans to pay for men's vasectomies regardless of any deductible, it left Marylanders' high-deductible health plans (HDHPs) incompatible with IRS rules for [HSAs]. The IRS has now provided two years of temporary relief to Maryland's HSA holders and those who might be similarly situated elsewhere[.]" (Society for Human Resource Management [SHRM])
Employers Push HSA Reforms as Lawmakers Mull Spending Bill Riders
"Introduced on March 1, the bill includes ... revisions to the rules governing HSAs and high-deductible health plans [which would]: [1] Clarify that enrollment in 'excepted benefits' does not jeopardize eligibility to contribute to an HSA; [2] Provide greater flexibility to offer first-dollar or lower-deductible coverage of health services at onsite medical or retail health clinics; ... [3] Allow conversion from a health FSA or [HRA] to an HSA ... [4] Provide greater flexibility to offer first-dollar coverage of services and medications for certain chronic diseases; [5] Allow an annually capped amount of HSA dollars to pay for qualified sports and fitness expenses." (Mercer)
Credit Union HSA Update, as of December 31, 2017
"HSA deposits held at credit unions totaled $1.47 billion as of 12/31/17, up 6.2% year-over-year.... [T]he average HSA balance at a credit union is $2,546 as of 12/31/17, up 10.6% year-over-year.... There are 843 credit unions holding HSA deposits as of 12/31/17 (15% of credit unions), up from 832 credit unions at the end of 2016." (Devenir)
[Guidance Overview] IRS Issues Immediately Effective HSA Guidance
"To avoid penalties, any employees who already contributed the maximum $6,900 prior to March 5 will need to withdraw their excess contributions (including interest on the excess contributions) as taxable income. It does not appear that employers need to treat the excess contributions as taxable wages for W-2 purposes, however, because the employer presumably had a reasonable belief at the time of the contribution (prior to March 5) that the contribution was excludable from wages." (Groom Law Group)
[Guidance Overview] IRS Reduces 2018 HSA Limit for Family Coverage
"The downward adjustment of the HSA limit for individuals enrolled in family coverage presents administrative issues for employers and HSA administrators as many HSA enrollees may have already maxed out their family contributions. This is particularly challenging if an individual had contributed the IRS-approved $6,900 maximum amount and used all of the funds for permitted medical expenses[.]" (Proskauer's Employee Benefits & Executive Compensation Blog)
[Guidance Overview] 2018 HSA Family Contribution Limit Reduced by $50
"A number of organizations and trade groups have approached the IRS to discuss transition relief or other solutions that would minimize disruption and unexpected administrative burdens imposed on employers and individuals.... [E]mployers should act now to identify employees who, when combined with any company HSA contribution, elected to contribute more than $6,850 to an HSA, and should reach out to relevant vendors to discuss the process for making changes to employee HSA contribution elections." (Winston & Strawn LLP)
[Guidance Overview] 2018 Family HSA Limit Reduced
"The tax reform legislation enacted late last year changed the method of adjusting for inflation beginning in 2018 to a 'chained CPI' approach which tends to produce lower cost of living increases.... Most of the limits were not adjusted as a result of this change. However, the IRS made one key adjustment regarding the 2018 family HSA contribution limit, decreasing it from $6,900 to $6,850.... Employers with high deductible health plans will want to communicate this decrease in the limit to employees as soon as possible in order to avoid excess contributions by employees enrolled in family coverage." (Miller Johnson)
[Guidance Overview] IRS Modifies Certain 2018 Benefit Limits (PDF)
"The 2018 amount that can be excluded from an employee's gross income for the adoption of a child with special needs has been lowered to $13,810 (originally $13,840) ... . The amount excludable from an employee's gross income begins to phase out under Section 137(b)(2)(A) for taxpayers with 2018 modified adjusted gross income in excess of $207,140 (originally $207,580)." (Cherry Bekaert Benefits Consulting, LLC)
[Guidance Overview] IRS Provides Transition Rule for HSA-Incompatible State-Mandated Benefits, Lowers 2018 HSA Contribution Maximum
"Maryland recently mandated coverage of male sterilization, which rendered certain health insurance plans regulated by the state incompatible with HSAs. In response, the IRS has temporarily restored eligibility to make HSA contributions for persons enrolled in plans with state-mandated benefits for male sterilization or contraceptives.... The recent federal tax reform law changed the index used for calculations to determine certain limits and penalty amounts for 2018, forcing the IRS to adjust several such limits and amounts even though the 2018 calendar year has already begun." (Lockton)
[Guidance Overview] 2018 HSA Family Contribution Limit Reduced to $6,850
"Employers with benefit administration systems will need to work with the system administrator to revise the maximum family limit in the system, and recalculate deductions for any employee who had elected to contribute up to the original $6,900 limit.... Employers that already contributed $6,900 to an employee's HSA will want to take corrective action by requesting the HSA custodian return the excess contribution to the employer before the end of 2018 to avoid adverse tax consequences for the affected employees." (ABD Insurance & Financial Services)
[Official Guidance] Text of IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans, for Use in Preparing 2017 Returns (PDF)
22 pages. "This publication explains the following programs. [1] Health Savings Accounts (HSAs). [2] Medical Savings Accounts (Archer MSAs and Medicare Advantage MSAs). [3] Health Flexible Spending Arrangements (FSAs). [4] Health Reimbursement Arrangements (HRAs)." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Rev. Proc. 2018-18: Inflation-Adjusted Amounts, Revised for Statutory Amendments of the Budget Reconciliation Act (PDF)
"Employee Health Insurance Expense of Small Employers: For taxable years beginning in 2018, the dollar amount in effect under Section 45R(d)(3)(B) is $26,600. This amount is used under Section 45R(c) for limiting the small employer health insurance credit...

"Medical Savings Accounts: For taxable years beginning in 2018, the term 'high deductible health plan' as defined in Section 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,300 and not more than $3,450, and under which the annual out-of-pocket expenses ... do not exceed $4,550....

"Adoption Assistance Programs: For taxable years beginning in 2018, under Section 137(a)(2), the amount that can be excluded from an employee's gross income for the adoption of a child with special needs is $13,810 ... [or] for other adoptions by the employee is $13,810. The amount excludable from an employee's gross income begins to phase out under Section 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $207,140 and is completely phased out for taxpayers with modified adjusted gross income of $247,140 or more....

"Health Savings Accounts: For calendar year 2018, the annual limitation on deductions under Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450 ... [and] for an individual with family coverage ... is $6,850." (Internal Revenue Service [IRS])
Employer Contributions Help Drive HSA Deposit Growth
"Growth in health savings account (HSA) deposits continued at a rapid rate last year, with a 22 percent increase in assets from 2015 to 2016 ... HSAs now hold close to $37 billion in assets ... [In] 2016, employer contributions accounted for 26 percent and employee contributions accounted for 46 percent of all HSA contributions." (Ascensus)
Are High-Deductible Health Plans and HSAs Dead in the Water?
"If you don't have those data transparency tools to make those decision when you have a high deductible health plan, you can get caught in a situation where the exact same test or service [vary widely in price]. I think that's one of the areas that unless the plan members are empowered to have that information to make those decisions, it's kind of putting a Band-Aid on the situation." (Employee Benefit Adviser)
More Employees Enroll in HSAs for Long-Term Savings
"While paying for health care costs in retirement does not top the list of health care concerns overall, this financial burden holds prominence among employees' concerns for the future when compared to lifestyle expenses. Among those surveyed, 68.7% are more concerned about paying for insurance premiums and other medical expenses than they are about paying for lifestyle items like vehicles and housing in retirement. This is up from 63% last year." (PLANSPONSOR)
2018 Trends Report Reveals HSA, FSA, and HRA Analytics
"44.9% of respondents chose to enroll in an HSA as a savings vehicle for future health care needs, over more immediate benefits like tax savings and lower premiums. This rate is up from 40.5% in our 2017 report. 62.9% of HSA account holders who leverage mutual fund investment options do so for shorter term goals, intending to withdraw investments for health care needs prior to retirement. For 45.7% of FSA respondents, the number one change they would like to make to their account would be to decrease the need to submit documentation for eligible expenses[.]" (Connect Your Care)
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