- The IRS recently announced cost-of-living adjustments to the annual dollar limits for employee benefit plans.
- Many of these limits will increase for 2019.
- In 2019, employees may contribute more money to their HSAs, health FSAs and 401(k) accounts.
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 2019. Although some of the limits will remain the same, many of the limits will increase for 2019.
The annual limits for the following commonly offered employee benefits will increase for 2019:
- 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 make sure that their plan administration will be consistent with the new limits in 2019. Employers may also want to communicate the new benefit plan limits to employees.
HSA and HDHP Limits
|HSA Contribution Limit|
|Self-only HDHP coverage||$3,450||$3,500||Up $50|
|Family HDHP coverage||$6,900||$7,000||Up $100|
|Catch-up contributions*||$1,000||$1,000||No change|
*Not adjusted for inflation
|Minimum deductible||Self-only coverage||$1,350||$1,350||No change|
|Family coverage||$2,700||$2,700||No change|
|Maximum out-of-pocket||Self-only coverage||$6,650||$6,750||Up $100|
|Family coverage||$13,300||$13,500||Up $200|
|Health FSA (limit on employees’ pre-tax contributions)||$2,650||$2,700||Up $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
|Limit (monthly limits)||2018||2019||Change|
|Transit pass and vanpooling (combined)||$260||$265||Up $5|
Adoption Assistance Benefits
|Tax exclusion (employer-provided assistance)||$13,840||$14,080||Up $240|
Qualified Small Employer HRA (QSEHRA)
|Payments and Reimbursements||Employee-only coverage||$5,050||$5,150||Up $100|
|Family coverage||$10,250||$10,450||Up $200|
|Employee elective deferrals||$18,500||$19,000||Up $500|
|Catch-up contributions||$6,000||$6,000||No change|
- IRS Revenue Procedure 2018-30 (HSA/HDHP limits for 2019)
- IRS Revenue Procedure 2018-57 (health FSA, adoption assistance and transportation plan limits for 2019)
- IRS Notice 2018-83 (retirement plan limits for 2019)
This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.