On May 4, 2017, the Internal Revenue Service (“IRS”) announced the 2018 inflation-adjusted amounts for Health Savings Account (“HSA”) contributions that included a family coverage limit of $6,900. On March 5, 2018, the IRS reduced the 2018 contribution limit for family coverage from $6,900 to $6,850. This reduction was due to a provision in the Tax Cuts and Jobs Act.
However, the IRS retracted that change on April 26, 2018 due to unanticipated administrative and financial burdens. The revised HSA contribution for family coverage will be $6,900 for 2018.
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 | 6,900 | 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 more information about the new, amended IRS employee plan limits, contact your ORBA advisor or 312.670.7444.
