The annual limit on deductible contributions to a health savings account will jump by $50 for individuals and $100 for families next year, the IRS announced late last week.
For 2019, the annual limit on deductible contributions will be $3,500 for individuals with self-only coverage, a $50 increase from 2018, and $7,000 for family coverage, a $100 increase from 2018.
Meanwhile, the minimum deductible for a qualifying high-deductible health plan remains unchanged for 2019: $1,350 for individual coverage and $2,700 for family coverage.
Annual out-of-pocket expenses will also increase in 2019: Deductibles, copayments and other amounts that do not include premiums will have a maximum limit of $6,750 for individual coverage next year, up $100 from 2018, and $13,500 for family coverage, up $200 from 2018.
Earlier this year, the IRS changed the family coverage contribution limit for 2018 for HSAs from $6,900 to $6,850 in response to the Tax Cuts and Jobs Act, but then reversed course and raised it again to $6,900.
HSA enrollment continues to grow, especially as employees look at the accounts as a way to save for medical expenses in retirement. High-deductible health plan and HSA enrollment reached 21 million members in 2017, according to research out last month from America’s Health Insurance Plans.
“We’re increasingly seeing HSAs function as a critical resource for Americans to fund their care today, tomorrow and in retirement,” says Harrison Stone, general counsel at ConnectYourCare, a health savings account provider. “Annual contribution limit increases allow HSAs to maintain their value and further grow their role as a key retirement planning building block.”
HSA contribution limits are updated annually to reflect cost-of-living adjustments. The increases are detailed in Revenue Procedure 2018-30 and take effect in January.