Another surprise

The FEHBlog is convinced that there is no such thing as a good surprise. Today’s surprise was Monday’s IRS bulletin which announced (p. 400) that

Annual contribution limitation. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,850.

The problem is that last May the IRS (Rev Proc. 2017-37) announced that the 2018 HSA contribution limits would be $3,450 self only (ok so far) and $6,900 for family coverage. So that IRS had dropped the family maximum by $50.

What happened? The tax reform act requires inflation adjustments to be based on the chained CPI-U which produces lower adjustments than the traditional CPI-U.

If someone has maxed out their HSA contributions for 2018, the HSA bank should be able to refund the $50 overage. It would be advisable to ask. Remember that if you are 55 or older, you can make a $1000 catch up contribution on top of the statutory maximum.

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