The IRS released the inflation adjusted amounts for 2019 relevant to HSAs and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.
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2019
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2018
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Change
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Annual HSA Contribution Limit
(employer and employee)
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Self-only: $3,500
Family: $7,000
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Self-only: $3,450
Family: $6,900*
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Self-only: +$50
Family: +$100
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HSA catch-up contributions
(age 55 or older)
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$1,000
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$1,000
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No change
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Minimum Annual HDHP Deductible
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Self-only: $1,350
Family: $2,700
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Self-only: $1,350
Family: $2,700
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No change
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Maximum Out-of-Pocket for HDHP
(deductibles, co-payment & other amounts except premiums)
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Self-only: $6,750
Family: $13,500
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Self-only: $6,650
Family: $13,300
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Self-only: +$100
Family: +$200
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Out-of-Pocket Limits Applicable to Non-Grandfathered Plans
The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2019.
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2019
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2018
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Change
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ACA Maximum Out-of-Pocket
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Self-only: $7,900
Family: $15,800
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Self-only: $7,350
Family: $14,700
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Self-only: +$550
Family: +$1,100
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Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage, if the family out-of-pocket limit is above $7,900 (2019 plan years) or $7,350 (2018 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). A one-year extension of transition relief was recently announced extending the transition relief to policy years beginning on or before October 1, 2019, provided that all policies end by December 31, 2019.
Next Steps for Employers
As employers prepare for the 2019 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:
- HDHPs cannot have an embedded family deductible that is lower than the minimum HDHP family deductible of $2,700.
- The out-of-pocket maximum for family coverage for an HDHP cannot be higher than $13,500.
All non-grandfathered plans (whether HDHP or non-HDHP) must cap out-of-pocket spending at $7,900 for any covered person. A family plan with an out-of-pocket maximum in excess of $7,900 can satisfy this rule by embedding an individual out-of-pocket maximum in the plan that is no higher than $7,900. This means that for the 2019 plan year, an HDHP subject to the ACA out-of-pocket limit rules may have a $6,750 (self-only)/$13,500 (family) out-of-pocket limit (and be HSA-compliant) so long as there is an embedded individual out-of-pocket limit in the family tier no greater than $7,900 (so that it is also ACA-compliant).
Stacy Barrow advises UBF clients on various topics around ERISA and the ACA. One of the nation’s leading experts on the Affordable Care Act, Stacy uses a practical, business-focused approach to counsel his clients on all matters related to employee benefit plans. Stacy also has extensive technical knowledge and experience designing and implementing health and welfare plans that meet the numerous and intricate requirements of applicable federal and state law.