Many employee benefits are subject to annual dollar limits that are periodically increased for inflation. The IRS recently announced cost-of-living adjustments to the annual dollar limits for various welfare and retirement plan limits for 2019. Although some of the limits will remain the same, many of the limits will increase for 2019.
The annual limits for the following commonly offered employee benefits will increase for 2019:
- High deductible health plans (HDHPs)
- Health savings accounts (HSAs)
- Health flexible spending accounts (FSAs)
- 401(k) plans
- Transportation fringe benefits
- QSEHRA limits
Employers should update their benefit plan designs for the new limits and make sure that their plan administration will be consistent with the new limits in 2019. Employers may also want to communicate the new benefit plan limits to employees.
HDHPs and HSAs
The IRS limits for HSA contributions and HDHP maximum out-of-pocket limits will also increase for 2019. The HSA contribution limits will increase effective Jan. 1, 2019, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2019.
The increased 2019 limits are as follows:
- HSA contribution limit
- Self-only—$3,500 (up $50)
- Family—$7,000 (up $100)
- HDHP maximum out-of-pocket expense limit
- Self-only—$6,750 (up $100)
- Family—$13,500 (up $200)
The HDHP minimum deductible amount will not change from 2018 to 2019, and the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older will remain at $1,000.
The health FSA contribution limit will increase $50 for 2019, bringing the FSA dollar limit on employee salary reduction contributions to $2,700 for taxable years beginning in 2019. There is no change for dependent care FSA contributions.
401(k) Plan Contributions
The employee elective deferrals for 401(k) contributions will increase $500 for 2019, bringing the limit to $19,000. The limit on catch-up contributions will remain at $6,000.
Transportation Fringe Benefits
The monthly limits on transit pass and vanpooling (combined), and parking will increase $5 each for 2019, bringing the monthly limit to $265.
The payment and reimbursement limits for qualified small employer health reimbursement arrangements (QSEHRAs) will increase in 2019 as well. For employee-only coverage, the limit will increase to $5,150 (up $100), while the family coverage limit will increase to $10,450 (up $200).
For More Information
These are not the only benefit plan limits that will change for 2019. Contact us to learn about what other limits will be changing.
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