Compliance Check: 2018 IRS Benefit Limits

Written by benefitexpress | October 24, 2017

As a benefits pro, you're an invaluable resource for your employees and clients. But what do you do when even you don't have the answers? Call in the compliance expert at benefitexpress, Larry Grudzien, for a Compliance Check.

Today, the Internal Revenue Service announced in Revenue Procedure 2017-58 the annual inflation adjustments for more than 40 tax provisions for 2018, including the tax rate schedules and other tax changes. This Revenue Procedure provides details about these annual adjustments.

There are several benefit limitations for 2018 included: 

  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) increased to $2,650.
  • The amount for the adoption credit or the amount excluded for adoption assistance allowed for an adoption of a child with special needs increased to $13,840.
  • The dollar amount for employee health Insurance expense of small employers is $26,700. 
  • The monthly limitation for qualified transportation fringe benefit regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $260. The monthly limit for qualified parking is also $260.
  • The limitations regarding eligible long-term care premiums includible in the term "medical care," are increased as follows:

 

Attained Age Before Close of Taxable Year Limitation on Premiums
40 or less $420
More than 40 but not more than 50 $780
More than 50 but not more than 60 $1,560
More than 60 but not more than 70 $4,160
More than 70 $5,200

  • The deductible and out-of-pocket limits for "high deductible health plans" for Medical Savings Accounts are as follows:
    • For self-only coverage, a health plan that has an annual deductible that is not less than $2,300 and not more than $3,450, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,600
    • For family coverage, a health plan that has an annual deductible that is not less than $4,600 and not more than $6,850, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,400 
  • The dollar amount used to determine individual mandate penalty for failure to maintain minimum essential coverage is $695.

 

For a copy of Revenue Ruling 2017-58 please click here: https://www.irs.gov/pub/irs-drop/rp-17-58.pdf   


Lawrence (Larry) Grudzien, JD, LLM is an attorney practicing exclusively in the field of employee benefits. He has experience in dealing with qualified plans, health and welfare, fringe benefits, and executive compensation areas. He has more than 35 years' experience in employee benefit law. He can be found on his website, or email him at larry@larrygrudzien.com.

Topics: HIPAA