The Internal Revenue Service released the annual inflation adjustments that will apply to certain benefit plan tax provisions in 2018. Revenue Procedure 2017-58, which can be accessed by clicking here, identifies inflation-adjusted items for different provisions of the tax code. From an employee benefits standpoint, the following limits may be of interest to employers:

  • The dollar limit on voluntary employee salary reduction contributions to health flexible spending accounts is increased to $2,650 for plan years beginning in 2018.
  • The monthly exclusion amount for transportation and transit passes is increased to $260.
  • The monthly limit for the qualified parking exclusion is increased to $260.
  • The dollar amount used to determine the penalty for an individual who does not maintain minimum essential health coverage remains at $695.
  • For participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible of not less than $2,300 but not more than $3,450 (increased from 2017).  For self-only coverage, the maximum out of pocket expense amount is increased to $4,600. For family coverage, the annual deductible minimum is $4,600 and maximum is $6,850 (increased from 2017). The out of pocket expense limit for family coverage is increased to $8,400.
  • The dollar amount that may be claimed as an employee health insurance expense of small employers is increased to $26,700. This amount is used for limiting the small employer health insurance credit and for determining who is a small employer.
  • The maximum amount that can be excluded from an employee’s gross income for qualified adoption expenses furnished pursuant to an adoption assistance program is increased to $13,840.

As always please contact your Total Benefit Solutions account manager at (215)355-2121 if you have any questions or concerns.