IRS Plays Emily Litella Regarding 2018 HSA Family Contributions
In May, 2017, the IRS released the 2018 HSA contributions limits in Rev Proc 2017-37, amongst other HSA-related indexed numbers, stating that the maximum contribution for those in family HDHP coverage would be $6,900. Congress then passed its Reconciliation Act in December, 2017, changing the indexing methodology for a number of benefit-related (and other) limits to utilize something called “chained-CPI,” as opposed to the regular CPI that had been used for decades. This in turn caused the IRS to recalculate its 2018 limits for benefit plans, and on March 2, 2018 issued Rev Proc 2018-18, retroactively reducing the 2018 family HSA maximum contribution amount by $50 to $6,850.
Needless to say, this caused many employers and individuals significant heartburn (a condition covered by those in an HSA), since some plans allowed front-loading of HSA contributions prior to the March 2nd IRS reduction.
In a moment of rationality, the IRS performed an Emily Litella skit (for our younger readers, see an early SNL clip here), announcing in Rev Proc 2018-27 to ignore 2018-18 and reinstating the family maximum HSA contribution for 2018 to $6,900.
In the words of Bill Shakespeare, “Much Ado About Nothing.”