IRS Announces Employee Benefit Plan Limits for 2018

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Many employee benefits are subject to annual dollar limits that are periodically increased for inflation. The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the annual dollar limits for various welfare and retirement plan limits for 2018. Although some of the limits will remain the same, many of the limits will increase for 2018.

The annual limits for the following commonly offered employee benefits will increase for 2018:

  • High deductible health plans (HDHPs) and health savings accounts (HSAs);
  • Health flexible spending accounts (FSAs);
  • Transportation fringe benefit plans; and
  • 401(k) plans.

Employers should update their benefit plan designs for the new limits and also make sure that their plan administration will be consistent with the new limits in 2018. Employers may also want to communicate the new benefit plan limits to employees in connection with annual open enrollment.

HSA and HDHP Limits

HSA Contribution Limit
Limit20172018Change
Self-only HDHP coverage$3,400$3,450Up $50
Family HDHP coverage$6,750$6,900Up $150
Catch-up contributions*$1,000$1,000No change

*Not adjusted for inflation

HDHP Limits
Limit20172018Change
Minimum deductibleSelf-only coverage$1,300$1,350Up $50
Family coverage$2,600$2,700Up $100
Maximum out-of-pocketSelf-only coverage$6,550$6,650Up $100
Family coverage$13,100$13,300Up $200

FSA Benefits

FSA Limits
Limit20172018Change
Health FSA (limit on employees’ pre-tax contributions)$2,600$2,650Up $50
Dependent care FSA (tax exclusion)*$5,000 ($2,500 if married  and filing taxes separately)$5,000 ($2,500 if married and filing taxes separately)No change

*Not adjusted for inflation

Transportation Fringe Benefits

Transportation Benefits
Limit (monthly limits)20172018Change
Transit pass and vanpooling (combined)$255$260Up $5
Parking$255$260Up $5

Adoption Assistance Benefits

Adoption Benefits
Limit20172018Change
Tax exclusion (employer-provided assistance)$13,570$13,840Up $270

Qualified Small Employer HRA (QSEHRA)

QSEHRA
Limit20172018Change
Payments and ReimbursementsEmployee-only coverage$4,950$5,050Up $100
Family coverage$10,000$10,250Up $250

401(k) Contributions

401(k) Contributions
Limit20172018Change
Employee elective deferrals$18,000$18,500Up $500
Catch-up contributions$6,000$6,000No change

 

2019-03-07T20:30:44-05:00