IRS Update: HSA and HDHP Maximums


Baker Tilly Vantagen is committed to sharing IRS-issued updates that impact employers and employees alike. In the ever-changing world of employee benefits, we are here to distribute the important information you need to make benefits-related decisions.  Please consider the following when planning for your upcoming plan year. With Health Care Reform moving in and out of legislation, the following may be subject to change. Baker Tilly Vantagen will keep you abreast of all the latest changes and requirements.

HSA and HDHP Maximums:  The IRS has just released the HSA and HDHP maximums for calendar year 2018.  Effective January 1, 2018, the annual HSA contribution maximum for individual coverage is $3,450 and for family coverage is $6,900. The minimum deductible for an HDHP remains the same at $1,350 for individual coverage and $2,700 for family coverage.  The maximum out-of-pocket amount for an HDHP changes to $6,650 for individual coverage and $13,300 for family. It is important to keep these changes in mind when preparing for the 2018 plan year.

FSA Eligible Purchases: The IRS recently issued an informational letter confirming health insurance premiums (including Medicare premiums) are not considered eligible expenses when using a health care Flexible Spending Account (FSA).  While this regulation has been in place for quite some time, this is a good reminder to educate your employees on what constitutes an “eligible expense”.  An employee who enrolls in an FSA thinking they can use those funds for insurance premiums (or some other ineligible expense) may be quite upset when they learn they can’t spend their money that way and they can’t un-enroll in this benefit.

This is a common question that comes in to our Employee Benefits Center.  It’s important to be proactive in communicating to your team so they feel confident and comfortable using their account.  We have great resources available for FSA participants to help educate them on what is/is not an eligible expense.  If you’re looking to do some education, contact Nicole Olszyk at for additional resources.