Tag Archives: HSA

2018 HSA IRS Plan Maximums

The IRS recently released Revenue Procedure 2017-37, which provides information on the limits for Health Savings Accounts (HSAs) for 2018. The annual contribution limitation on deductions for individuals with self-only coverage under a high deductible health plan will be $3,450. The deduction limitation for an individual with family coverage will be $6,900.

Please note, these limits reflect current law. Under the American Health Care Act (AHCA), passed by the House of Representatives earlier this month, the contribution limit rises to the statutory out-of-pocket maximum  ($6,650/$13,300) beginning in 2018. The AHCA is not yet a law. We will provide modified contribution limits if legislation subsequently changes the current 2018 limits.

Minimum Deductible for HDHP: In order for a health insurance plan to be considered a “High Deductible Health Plan” for 2018, the deductible must be at least $1,350 for self-only coverage and $2,700 for family coverage.

Maximum Out-of-Pocket: Out-of-pocket expenses may not exceed $6,650 for self-only coverage and $13,300 for family coverage.

These changes will go into effect for calendar year 2018.

**Please note that these limits are subject to change.  The American Health Care Act, if passed, includes changes related to Health Savings Account Limits.

Health Savings Account (HSA)- New Annual Maximums 

Coverage Level 2017 2018
HSA Contribution Individual $3,400 $3,450
Amounts Family $6,750 $6,900
>55 Catch-up $1,000 $1,000
Min HDHP Individual $1,300 $1,350
Deductible Amounts Family $2,600 $2,700
Max Out of Pocket Individual $6,550 $6,650
HDHP Amounts Family $13,100 $13,300

HSA Limits Released for 2017

On Thursday, the IRS released the 2017 inflation adjusted amounts for Health Savings Accounts (HSAs). The maximum contribution amounts for calendar year 2017 will increase by $50 for individuals with self-only coverage under a high deductible plan to $3,400, while the contribution maximum will remain flat for family coverage at $6,750.

Sincerely,

Millennials Concerned of Out-of-Pocket Costs

Health plans that shift more up-front costs onto you are rapidly becoming the norm. But millennials don’t seem happy about taking on the risk, even in exchange for a lower price.

Millennials want their parents’ old health insurance plan. A new survey from Bankrate found that almost half of 18-to-29-year-olds prefer a health plan with a lower deductible and higher premiums—meaning millennials would rather pay more out of their paycheck every month and pay less when they go to the doctor. Compared to other age groups, millennials are the most likely to prefer plans with higher premiums.

That surprised Bankrate insurance analyst Doug Whiteman. “One would assume people in this age group were not likely to get sick, so they’d choose the cheapest possible plan just to get some insurance,” he says.

In theory, millennials are perfect candidates for high-deductible plans. The conventional wisdom is that since young and healthy people tend to have very low health-care costs, they should opt for a higher deductible and keep more of their paychecks.

If, for example, you go to the doctor only for free preventive care, switching from the average employer-sponsored traditional PPO plan to the average high-deductible health plan would save a single person $229 a year in premiums, according to the Kaiser Family Foundation’s 2014 data.

Millennials shopping in the new health insurance marketplace last year didn’t want the cheapest plans either. According to the Department of Health and Human Services, more than two-thirds of 18-to-34-year-olds chose silver plans, which have mid-level premiums and deductibles. Only 4% picked catastrophic plans, the ones with the lowest premiums and out-of-pocket limits of around $6,000.

Why are millennials choosing to pay more for health care? Turns out the “young invincibles” don’t feel so invincible after all, says Christina Postolowski, health policy manager at a youth advocacy group called—as it happens—Young Invincibles. “Millennials are risk-averse and concerned about their out-of-pocket costs if something happens to them,” Postolowski says.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

HSAs Popular Among Employers

Health savings accounts are gaining in popularity with small to mid-size employers at the same time the appeal of health reimbursement accounts is waning.

A recent United Benefit Advisors survey finds HSAs are outpacing HRAs in both adoption and participation rates. The number of employers offering HSAs increased from 14.7% to 15.1% in 2013, and employee participation in these plans rose from 7.1% to 8.8% in the same period. By contrast, the percentage of U.S. employers offering plans with HRAs in 2013 was only 8.6% and employee participation in these plans dropped from 8.8% in 2012 to 8.6% in 2013.

Now that metal tier plans under the Affordable Care Act are allowed higher deductibles, employers are increasingly looking at HSA-qualified plans for their upcoming plan year, UBA says. Benefit advisers are already fielding questions from employers about what HSA funding levels will keep their plan competitive, whether to consider a consumer-driven health plan wrapped with a partially or fully funded HSA account, and whether an employer should consider partially self-funding a plan to lower premiums and deductibles, UBA says.

The ACA originally capped deductibles at $2,000 for individuals and $4,000 for families, forcing employers to buy plans with lower deductibles, explains Elizabeth Kay, compliance and retention analyst for the San Mateo-based benefit adviser group AEIS, a UBA partner firm.

“As a result, we saw premiums go up dramatically in 2014 — for some as much as 250% to 400%,” she says.

In 2014, as part of the Protecting Access to Medicare Act, ACA legislation was amended to allow metal tier plans [e.g., platinum, gold, silver, etc.] to have higher deductibles.

“I think carriers will be more creative with their plan designs next year, and we may see a comeback of higher deductible and HSA qualified plans,” Kay adds.

HSAs have “proven themselves to be better at driving consumer behavior and cost containment while maintaining compliance with the maximum allowable out-of-pocket costs under the ACA of $6,350 for individual and $12,700 for family coverage,” UBA says in its report.

The survey finds that on average, funding levels for plans with HSAs have remained constant for individuals at approximately $574 for both 2012 and 2013, while average funding for families increased from $928 in 2012 to $958 in 2013

By contrast, funding levels of plans with HRAs increased significantly for individuals from $1,605 in 2012 to $1,766 in 2013, and for families from $3,075 in 2012 to $3,506 in 2013.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

IRS Announces Inflation-Adjusted Increase for HSAs

The IRS released increases for HSAs and high-deductible health plans (HDHPs) for 2015.

The maximum annual HSA contribution for self-only HDHP coverage will increase from $3,300 to $3,350. The maximum annual HSA contribution for family HDHP coverage will increase from $6,550 to $6,650.

  • The age 55 catch-up contribution continues to be $1,000
  • The minimum HDHP deductible limit changes:
    • Self-only coverage increased from $1,250 to $1,300
    • Family coverage increased from $2,500 to $2,600

To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary