IRS issues HSA contribution limits for 2019

By Sally P. Schreiber, J.D.

The IRS issued the calendar year 2019 inflation-adjusted figures for the annual contribution limits for health savings accounts (HSAs) and the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans (Rev. Proc. 2018-30).

Under Sec. 223, individuals who participate in a high-deductible health plan (HDHP) are permitted a deduction for contributions to HSAs set up to help pay their medical expenses. The contribution deduction limit is subject to an annual inflation adjustment.

For 2019, the annual limit on deductible contributions is $3,500 for individuals with self-only coverage (a $50 increase from 2018) and $7,000 for family coverage (a $100 increase from 2018).

The IRS recently announced that the 2018 limit for family coverage is $6,900, after recalculating the amount under the new inflation adjustment of P.L. 115-97, the law known as the Tax Cuts and Jobs Act of 2017, as $6,850 and then granting relief for the retroactive change (see previous coverage here).

To be eligible to contribute to an HSA, an individual must participate in an HDHP, which is a health plan with an annual deductible that is not less than a certain limit each year and for which the annual out-of-pocket expenses, including deductibles, co-payments, and other amounts, but excluding premiums, do not exceed a certain limit each year (Sec. 223(c)).

The limits on annual deductibles are also subject to annual inflation adjustments. For 2019, the lower limit on the annual deductible for an HDHP is $1,350 for self-only coverage and $2,700 for family coverage, both unchanged from 2018. The upper limit for out-of-pocket expenses is $6,750 for self-only coverage and $13,500 for family coverage, both increased from 2018.

Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.

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