The year 2016 is progressing quickly, leaving organizations to think about what the upcoming 12 months have in store. The federal government already started putting healthcare requirements into perspective, as more information is released about future changes. The first alteration announced has to do with health savings accounts. But while that adjustment was first, it certainly won't be last:
A small variation
On April 29, the IRS distributed Revenue-Procedure 2016-28, which details HSA contribution limit modifications for 2017. This release is just the jumping off point for announcements of this kind. More information regarding cost-of-living based changes to tax advantaged accounts will come out in the fall.
The newest document, however, breaks down HSA contribution limits, minimum deductibles and out-of-pocket limits. The alterations are as follows, according to the IRS:
- The HSA contribution limit for employees only will increase $50 from $3,350 to $3,400. The family rate will remain the same at $6,750.
- HSA catch-up contributions see no change since 2016 and will stay at $1,000.
- The minimum deductible for high deductible health plans will hold at $1,300 for individuals and $2,600 for families.
- The HDHP out-of-pocket amounts – deductibles, co-payments and more – will remain at $6,550 for individuals and $13,100 for families.
The IRS recently announced contribution limits for HSAs in 2017.HSA dependent definition
Many employers are familiar with providing health insurance to the children of their workers. The Affordable Care Act allows companies to keep adult children on their parent's coverage until the child turns 26. The definition of a dependent is different, however, for those people utilizing HSAs.
Essentially, an employee with an adult child over the age of 24 cannot pay for this person's medical bills using the worker's HSA funds if the child can't be claimed an a dependent.
The IRS defines a dependent as the following:
- A qualifying child – son, daughter, stepchild, stepsibling or sibling.
- Not yet 19 – or not yet 24, if a student – at the end of a tax year, or is permanently and totally disabled.
- Has not provided more than one-half his or her own support during the taxable year.
- Has the same principal place of living as the covered employee for more than half of the taxable year.
It's important for companies of all sizes and industries to not only understand these IRS regulations, but comply with them. Failing to do so could put businesses in hot water and leave them with costly penalties to pay.
Triton Benefits can help companies sift through some of the more difficult information the IRS releases in the coming months. In addition, Triton Benefits can ensure businesses adhere to the government agency's regulations and will remain updated on any upcoming alterations in store for organizations.