Health Savings Account (HSA)
"NEW" IRS Decreases HSA Contribution Limits for Family HDHP Coverage
On Monday, March 5, 2018, the IRS announced that the previously released maximum family contribution limit to a Health Savings Account (“HSA”) is reduced from $6,900 to $6,850 in 2018. This change applies immediately and any family contribution to an HSA in 2018 over $6,850 could be subject to taxes and penalties.
The individual contribution limit for 2018 will remain $3,450.
HSAs work in combination with a "qualified" High Deductible Health Plan (HDHP). AURA's Consumer Driven Health Plan is a qualified HDHP. The HSA allows you to contribute funds on a pre-tax or tax-deductible basis, which you may use to pay for eligible medical expenses.
- Available to eligible individuals enrolled in the CIGNA CDHP
- A health savings account can be funded with your tax-exempt dollars
- Covers expenses incurred by you or your eligible tax dependents not paid by insurance
- Qualified medical and prescription drug expenses
- Dental and vision expenses
- Find a complete listing of eligible expenses in IRS Publication 502 found on www.irs.gov
Before an employee elects to participate in an FSA or HSA he or she should be aware that while participation in these plans reduces the employee’s taxable income, it may also reduce other benefits. Benefits that are calculated using the employee’s income (for example, social security or retirement benefits) will in turn be reduced. Because FSA and HSA contributions reduce your taxable income, you save money in FICA taxes, as well as federal (and, in some cases, state) income taxes. However, FSA and HSA contributions also lower the earnings that are reported to the Social Security Administration for purposes of calculating your Social Security benefit. Therefore, your future Social Security benefits may be slightly reduced if you participate in an FSA or HSA.
Employees reaching retirement age should speak with their financial advisors for more information regarding retirement planning decisions.