Employee Benefit Plan Limits for 2018

By GBS Team

Group Benefit Strategies Audit and Claim

Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the Internal Revenue Service (IRS). The following commonly offered employee benefits are subject to inflation-adjusted dollar limits:

  • High deductible health plans (HDHPs) and health savings accounts (HSAs);
  • Health flexible spending accounts (FSAs);
  • 401(k) plans; and
  • Transportation fringe benefit plans.

The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure that their plan administration will be consistent with the new limits.

This Compliance Overview includes a chart of the inflation-adjusted limits for 2018. Although some of the limits will remain the same, many of the limits will increase for 2018.

INCREASED LIMITS

  • HSA contribution limits for individuals with self-only or family coverage under an HDHP
  • Employees’ elective deferrals to 401(k) plans, pre-tax and Roth
  • Health FSA limit for employee pre-tax contributions
  • Monthly limits for transportation fringe benefit plans
  • HDHP minimum deductibles and maximum out-of-pocket limits

UNCHANGED LIMITS

  • Tax exclusion for dependent care FSA benefits
  • Catch-up contributions to an HSA
  • Catch-up contributions to a 401(k) plan
Limit 2017 2018 Change
HSA Contribution Limit
Self-only $3,400 $3,450 Up $50
Family $6,750 $6,900 Up $150
Catch-up contributions* $1,000 $1,000 No change
HDHP Minimum Deductible
Self-only $1,300 $1,350 Up $50
Family $2,600 $2,700 Up $100
HDHP Out-of-pocket Maximum
Self-only $6,550 $6,650 Up $100
Family $13,100 $13,300 Up $200
Out-of-pocket Maximum on Essential Health Benefits (non-grandfathered plans)
Self-only $7,150 $7,350 Up $200
Family $14,300 $14,700 Up $400
Health FSA
Limit on employees’ pre-tax contributions $2,600 $2,650 Up $50
Dependent Care FSA*
Tax exclusion $5,000 ($2,500 if married and filing taxes separately) $5,000 ($2,500 if married and filing taxes separately) No change
Transportation Fringe Benefits (monthly limits)
Transit pass and vanpooling (combined) $255 $260 Up $5
Parking $255 $260 Up $5
401(k) Contributions
Employee elective deferrals $18,000 $18,500 Up $500
Catch-up contributions $6,000 $6,000 No change