The IRS announced Monday that the limit for family health savings account (HSA) contributions would be reduced to $6,850, a decrease of $50. This change is effective immediately and applies to 2018 contributions.
The reduction results from a change in the way inflation-related cost of living increases are calculated, a provision of the Tax Cuts and Jobs Bill passed at the end of 2017. This change in the law also impacted employer adoption assistance programs. Other benefit limits were not affected by the change in calculation.
Employers are encouraged to work with their HSA administrator to identify employees who could be impacted by the reduced limit and determine whether contribution adjustments need to be made, or a refund given in the case of excess contribution.