Client Alerts Amended 2018 Employee Benefit Plan and Transportation Limits

Publication
03.22.18 | By: Larry A. Ruff

On March 5, 2018, the Internal Revenue Service (“IRS”) announced a reduction to the 2018 contribution limit for family coverage under a high deductible health plan from $6,900 to $6,850.

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On March 5, 2018, the Internal Revenue Service (“IRS”) announced a reduction to the 2018 contribution limit for family coverage under a high deductible health plan from $6,900 to $6,850.

This reduction is due to a provision in the Tax Cuts and Jobs Act that replaces the consumer price index with a “chained consumer price index” for indexing dollar thresholds applicable to HSAs. The table below presents the amended 2018 cost-of-living adjustments for retirement, health and welfare plans, and transportation programs for the revised family coverage limit.

Retirement Plan Limits
Notable 2018 annual retirement plan limitations, as compared to 2017, are as follows:

2018 2017
401(k), 403(b) & 457(b) plan employee deferrals $18,500  $18,000
Employee age 50 catch-up contribution 6,000 6,000
SIMPLE plan employee deferrals 12,500 12,500
SIMPLE plan age 50 catch-up contribution 3,000 3,000
IRA contribution limit (traditional and Roth) 5,500 5,500
IRA age 50 catch-up contribution 1,000 1,000
Defined contribution plan limit 55,000 54,000
Defined benefit plan limit 220,000 215,000
Annual compensation limit 275,000 270,000
Highly-compensated employee 120,000 120,000
Key employee 175,000 175,000
FICA taxable wage base 128,400 127,200

Health and Welfare Plan Limits
The 2018 annual limitations, as compared to 2017, are as follows:

2018 2017
Flexible Spending Account FSA $2,650    $2,600
Dependent Care FSA (not indexed) 5,000 5,000
HSA age 55 catch-up contribution (not indexed) 1,000 1,000
Self-only Coverage:
HSA contribution 3,450 3,400
Minimum deductible for HDHP 1,350 1,300
Maximum OOP expense limit for HDHP 6,650 6,550
Family Coverage:
HSA contribution 6,850 6,750
Minimum deductible for HDHP 2,700 2,600
Maximum OOP expense limit for HDHP 13,300 13,100

HSA = Health Savings Account
HDHP = High Deductible Health Plan
OOP = Out-Of-Pocket

Qualified Transportation Fringe Benefits 
The 2018 monthly qualified transportation fringe benefit limitations, as compared to 2017, are as follows:

2018 2017
Parking and Transit $260   $255
Bicycle 20 20

Plan sponsors should update payroll and plan administration systems for the 2018 cost-of-living adjustments and should incorporate the new limits in relevant employee and participant communications.

For further information about the new, amended IRS employee plan limits, contact Larry Ruff at lruff@orba.com or 312.670.7444 ORBA for assistance.

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