2019 HSA Limits & ACA Affordability

The IRS recently released Health Savings Account and ACA Affordability amounts for 2019.

Health Savings Accounts

Note that the annual contribution limits are pro-rated for each month an employee is enrolled in an HDHP.

In 2019, the minimum deductible for a qualifying HDHP remains $1,350 for self-only and $2,700 for family coverage.  The maximum out-of-pockets increase slightly to $6,750 for self-only and $13,500 for family HDHP coverage.

ACA Affordability Calculations

To avoid penalties, large employers must offer “affordable” medical coverage to full-time employees. In 2018, the medical plan is affordable as long as the employee contribution for single coverage in the lowest cost plan offered is no more than 9.56% of the employee’s income. In 2019, the affordability percentage is increased to 9.86% of the employee’s income.

Since employers typically do not know an employee’s household income, they can use one of three safe harbors to report “affordable” offers of medical coverage on the Forms 1095. If the employee self-only contribution is no more than $96.07 per month in 2018 and no more than $99.75 in 2019, the employer can use the Federal Poverty Level (FPL) safe harbor. Reporting is simplified for employers who are able to use the FPL safe harbor.

If the employee’s contribution is higher than the FPL safe harbor amount, then employers can use either the Rate of Pay (recommended) or Form W-2 safe harbor to report affordable offers of medical coverage.

Please contact your Keller account team for assistance determining which affordability safe harbor should be used for your 2018 Form 1095 reporting and if your contribution schedule needs to be adjusted based on the 2019 affordability percentage.