In March the IRS released cost-of-living adjustments (COLAs) that affect employee benefits retroactively for the 2018 calendar year.
The annual health savings account (“HSA”) contribution limit for individuals with family coverage is reduced to $6,850.
The amount that may be excluded from an employee’s gross income under an employer‑sponsored adoption assistance program for the adoption of a special needs child is now $40 less at $13,810. The adoption assistance program exclusion is now phasing out for taxpayers with modified adjusted gross income in excess of $207,140.
If you offer an Archer medical savings account the maximum out of pocket for individuals has been reduced $50 to $4,550.
Inform your employees about the new limits.
Make sure payroll doesn’t exceed these new limits.
Determine whether the adoption assistance program exclusion will affect payroll practices and benefit administration.
If you offer an Archer MSA (typically for small businesses and self-employed), consider how the lower out-of-pocket limit will affect the current health plan.
Update employee communications and new employee enrollment materials.