Why Family HSA’s are Changing in 2018

This article is sponsored by TrueNorth Wealth. TrueNorth Wealth is a Fee Only Financial Planning firm that can help people with complex wealth make decisions about things like changes to Family HSA’s. Their Certified Financial Advisors have a fiduciary responsibility to act in their client’s best interests.


IRS Changes HSA Family Contribution Limits for 2018

Maximum contribution limits for Family Health Insurance Savings Accounts (HSA) have now been lowered by $50 for 2018. This year, the IRS recalculated the HSA limit because of the Tax Cuts and Jobs Act that passed at the end of 2017. So, that act now applies the chained consumer price index (chained CPI) to increases in Family HSA’s. This also applies to other employee benefit contribution limits. The Internal Revenue Bulletin 2018-10 released March 5th, breaks this down as part of the IRS Revenue Procedure 2018-18.

What Does this Mean for You?

The new maximum contribution limit for 2018 is now $6,850. This is down from $6,900 in previous years. Plus, only Family HSA’s with high deductibles are changing this year. The self-coverage maximum contribution has not changed. It remains at $3,450.

Why is This Changing?

The reason for the adjustment is the recent Tax Cuts and Jobs Act of 2017. This act changed the inflation adjustment calculation amounts. Then, to arrive at a maximum figure, the previous amounts utilized the Consumer Price Index (CPI). Now, the IRS is using ‘chained CPI’. ‘Chained CPI’ is a guideline for calculating the cost of living increases. Healthcare benefits linked to chained CPI, like flexible spending accounts, are not changing in 2018. Although, employer adoption assistance is being slightly lowered. If you plan to utilize this, speak to your HR department.

What Should You Do with Your Family HSA’s?

Joseph Griffin, president of TrueNorth Wealth, a Utah Financial Planning and Wealth Management firm says that “We advise anyone who has not made their 2018 HSA contribution yet to be aware of the new family HSA limit”.

“If the maximum contribution for 2018 has already been reached, then an adjustment of $50 will need to be made. Speak to your employer, financial advisor, or your accountant to make the adjustment.” Griffin added.

Finally, a financial advisory company like TrueNorth Wealth can help walk you through some of these changes to see if you need to take action or not. They specialize in working with clients with complex wealth issues. Contact TrueNorth Wealth today to see how they can help you plan for your financial independence.