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2019 HSA Contribution Limits Released By The IRS

MAY 10, 2018


The IRS has announced 2019 HSA contribution limits as part of the release of Revenue Procedure 2018-30. The limits are:

HSA

2018

2019

Self-only HSA contribution limit 

$3,450

$3,500

Family HSA contribution limit

$6,900

$7,000


In 2019, the HSA contribution limit will increase to $3,500 for single (an increase of $50) and $7,000 for family (an increase of $100). As a reminder, the 2018 family HSA contribution limit also recently increased to $6,900 with the update released by the IRS on April 26, 2018.


2019 High-Deductible Health Plan (HDHP) deductible amounts and out-of-pocket expense limits were also announced:


HDHP (self-only coverage)

2018

2019

Annual deductible not less than: 

$1,350

$1,350

Annual out-of-pocket expenses don’t exceed:

$6,650

$6,750 

HDHP (family coverage) 

2018 

2019 

Annual deductible not less than: 

$2,700 

$2,700 

Annual out-of-pocket expenses don’t exceed: 

$13,300 

$13,500 

For your employees to be eligible to participate in a Health Savings Account, they must be enrolled in an HDHP.


On April 26, 2018, the IRS released an update to its Health Savings Account (HSA) contribution limit for families, returning the limit to $6,900 for 2018 (plus $1,000 if the accountholder is making a catch-up contribution). The limit change came on the heels of a previously announced reduction in March.  

The individual limit remains unchanged at $3,450. Clients and participants can take action to ensure that everyone is within compliance and aware of the new HSA family limit.

What steps should participants take?

Participants who were contributing the maximum limit of $6,900 prior to the change in March no longer need to lower their contribution to $6,850.

Those who did lower their HSA family contribution to $6,850 to reflect the March change may increase their contribution to $6,900. HSAs allow for contribution changes mid-year, so it’s easy for participants to make the adjustment. The rules state that if you did remove $50 from your HSA due to the reduction in March, you may repay the $50 to your HSA as a mistaken distribution. If you do not decide to repay the distribution, you may treat the distribution as an excess contribution. It's important to note that if the $50 distributed was from employer contributions to your HSA, under certain circumstances the $50 distribution may be taxable if not repaid to the HSA as a mistaken distribution. 

Participants can also set up text and/or email alerts to be notified when they’re close to their contribution limit or have exceeded their contribution limit for the tax year by going to the “Statements and Notifications” tab of their online account and selecting “Update Notification Preferences.”


What steps should employers take?

Employers who offer a High-Deductible Health Plan (HDHP) and an HSA should review their employees’ payroll elections and consider whether any employer contributions would put an employee above the family maximum.

More

2019 HSA Contribution Limits Released By The IRS

MAY 10, 2018


The IRS has announced 2019 HSA contribution limits as part of the release of Revenue Procedure 2018-30. The limits are:

HSA

2018

2019

Self-only HSA contribution limit 

$3,450

$3,500

Family HSA contribution limit

$6,900

$7,000


In 2019, the HSA contribution limit will increase to $3,500 for single (an increase of $50) and $7,000 for family (an increase of $100). As a reminder, the 2018 family HSA contribution limit also recently increased to $6,900 with the update released by the IRS on April 26, 2018.


2019 High-Deductible Health Plan (HDHP) deductible amounts and out-of-pocket expense limits were also announced:


HDHP (self-only coverage)

2018

2019

Annual deductible not less than: 

$1,350

$1,350

Annual out-of-pocket expenses don’t exceed:

$6,650

$6,750 

HDHP (family coverage) 

2018 

2019 

Annual deductible not less than: 

$2,700 

$2,700 

Annual out-of-pocket expenses don’t exceed: 

$13,300 

$13,500 

For your employees to be eligible to participate in a Health Savings Account, they must be enrolled in an HDHP.


On April 26, 2018, the IRS released an update to its Health Savings Account (HSA) contribution limit for families, returning the limit to $6,900 for 2018 (plus $1,000 if the accountholder is making a catch-up contribution). The limit change came on the heels of a previously announced reduction in March.  

The individual limit remains unchanged at $3,450. Clients and participants can take action to ensure that everyone is within compliance and aware of the new HSA family limit.

What steps should participants take?

Participants who were contributing the maximum limit of $6,900 prior to the change in March no longer need to lower their contribution to $6,850.

Those who did lower their HSA family contribution to $6,850 to reflect the March change may increase their contribution to $6,900. HSAs allow for contribution changes mid-year, so it’s easy for participants to make the adjustment. The rules state that if you did remove $50 from your HSA due to the reduction in March, you may repay the $50 to your HSA as a mistaken distribution. If you do not decide to repay the distribution, you may treat the distribution as an excess contribution. It's important to note that if the $50 distributed was from employer contributions to your HSA, under certain circumstances the $50 distribution may be taxable if not repaid to the HSA as a mistaken distribution. 

Participants can also set up text and/or email alerts to be notified when they’re close to their contribution limit or have exceeded their contribution limit for the tax year by going to the “Statements and Notifications” tab of their online account and selecting “Update Notification Preferences.”


What steps should employers take?

Employers who offer a High-Deductible Health Plan (HDHP) and an HSA should review their employees’ payroll elections and consider whether any employer contributions would put an employee above the family maximum.

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Goodbye "voluntary" benefits.


The class of benefits currently known as “voluntary” are about to get a nomenclature makeover that will have a huge big impact on their acceptance.


At the inaugural ASCEND Agency Growth & Leadership Summit held in Nashville in January, one of the agency leaders in attendance shared a fantastic new name for voluntary benefits that can usher in an era of phenomenal growth for these much-maligned benefits. If you think we’re exaggerating, read on.


What’s in a name?


Labeling these valuable and important benefits as "voluntary" benefits has been a huge mistake.


With benefit plans leaving employees with greater out-of-pocket exposure, referring to these benefits as voluntary fails to convey their substantial value. The term “voluntary” is a holdover from the past, and with more and more employers willing to pay all or part of the premium for these benefits, the label is no longer accurate. Moreover, with benefit advisers increasingly integrating these benefits into the medical plan to reduce the overall benefit spend, calling them voluntary ignores their valuable role in benefit plan design.


Goodbye voluntary benefits. Hello Enhanced Benefits!


Yes, they do supplement the core benefits. But being “supplemental” is not nearly as desirable as being “enhanced.”

More

Goodbye "voluntary" benefits.


The class of benefits currently known as “voluntary” are about to get a nomenclature makeover that will have a huge big impact on their acceptance.


At the inaugural ASCEND Agency Growth & Leadership Summit held in Nashville in January, one of the agency leaders in attendance shared a fantastic new name for voluntary benefits that can usher in an era of phenomenal growth for these much-maligned benefits. If you think we’re exaggerating, read on.


What’s in a name?


Labeling these valuable and important benefits as "voluntary" benefits has been a huge mistake.


With benefit plans leaving employees with greater out-of-pocket exposure, referring to these benefits as voluntary fails to convey their substantial value. The term “voluntary” is a holdover from the past, and with more and more employers willing to pay all or part of the premium for these benefits, the label is no longer accurate. Moreover, with benefit advisers increasingly integrating these benefits into the medical plan to reduce the overall benefit spend, calling them voluntary ignores their valuable role in benefit plan design.


Goodbye voluntary benefits. Hello Enhanced Benefits!


Yes, they do supplement the core benefits. But being “supplemental” is not nearly as desirable as being “enhanced.”

Less
ADDRESSING THE MYTHS OF LONG-TERM CARELess
ADDRESSING THE MYTHS OF LONG-TERM CARE

When it comes to LTC protection, it’s time to know the myths, master the facts, and have the conversation.


Retirement readiness risks come in all shapes and sizes, and few loom larger than the potential cost of long-term care (LTC).


Myth: “My health insurance provides all the protection I need for long-term care.”


Fact: Health insurance and long-term care protection are not interchangeable. Health insurance helps cover the cost of medical care, while LTC benefits help pay for other potentially costly services, including help with eating, bathing and getting dressed – services that are generally progressive, with the level of care growing over time.


Myth: “I can rely on a government program to take care of me.”


Fact: Government programs are limited by financial resources and availability. It can be difficult to qualify for government programs, and each program carries specific rules and requirements for covered services.


Myth: “LTC protection is something only old people need.”


Fact: It’s never too early to protect your future. Applying for LTC protection at a younger age can mean lower premiums, and it can improve an individual’s chances of getting approved for a policy or a contract. Waiting to purchase protection may increase the risk of paying higher age-based premiums or even being declined. And it’s important to remember that roughly 70 percent of Americans ages 65 and older will need some kind of help with the activities of daily living as they age.


Myth: “I can save the money I’ll need for LTC.”


Fact: Paying long term care expenses out-of-pocket can wipe out a lifetime of savings. Today, the average cost for a one-year stay in a private nursing home room is $83,580.1 At that rate, savings of $500,000 would be depleted in just a few years. And one-in-five Americans will require long term care services for five years or more.2


Myth: “LTC protection is too expensive.”


Fact: There are many combinations of LTC features and payment options that may work with a range of financial situations. Traditional LTC policies typically are funded like other insurance policies, with monthly or annual premiums that may be subject to periodic increases. Asset-based protection can provide a healthy mix of funding options – including a single lump-sum premium or options to pay level premiums over a period of 10 to 20 years.

More

When it comes to LTC protection, it’s time to know the myths, master the facts, and have the conversation.


Retirement readiness risks come in all shapes and sizes, and few loom larger than the potential cost of long-term care (LTC).


Myth: “My health insurance provides all the protection I need for long-term care.”


Fact: Health insurance and long-term care protection are not interchangeable. Health insurance helps cover the cost of medical care, while LTC benefits help pay for other potentially costly services, including help with eating, bathing and getting dressed – services that are generally progressive, with the level of care growing over time.


Myth: “I can rely on a government program to take care of me.”


Fact: Government programs are limited by financial resources and availability. It can be difficult to qualify for government programs, and each program carries specific rules and requirements for covered services.


Myth: “LTC protection is something only old people need.”


Fact: It’s never too early to protect your future. Applying for LTC protection at a younger age can mean lower premiums, and it can improve an individual’s chances of getting approved for a policy or a contract. Waiting to purchase protection may increase the risk of paying higher age-based premiums or even being declined. And it’s important to remember that roughly 70 percent of Americans ages 65 and older will need some kind of help with the activities of daily living as they age.


Myth: “I can save the money I’ll need for LTC.”


Fact: Paying long term care expenses out-of-pocket can wipe out a lifetime of savings. Today, the average cost for a one-year stay in a private nursing home room is $83,580.1 At that rate, savings of $500,000 would be depleted in just a few years. And one-in-five Americans will require long term care services for five years or more.2


Myth: “LTC protection is too expensive.”


Fact: There are many combinations of LTC features and payment options that may work with a range of financial situations. Traditional LTC policies typically are funded like other insurance policies, with monthly or annual premiums that may be subject to periodic increases. Asset-based protection can provide a healthy mix of funding options – including a single lump-sum premium or options to pay level premiums over a period of 10 to 20 years.

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