Benefits, Health Care Reform, Taxes, Fees & Penalties

2019 COLAs for Benefit Plans

IRS and Social Security Administration each year announce the cost-of-living adjustments affecting tax and employee benefits dollar amounts for the upcoming calendar year. Some highlights for 2019 (& 2018) are listed below.  Note that the annual cap on employee pre-tax contributions to a Health FSA (IRC §125) has increased $50, to $2,700; and the HCE threshold has increased $5,000 to $125,000. 

This article was updated Nov. 19, 2018.  The original post had several amounts “estimated” because we were still awaiting IRS Rev. Proc.  The IRS has now issued Rev. Proc. 2018-57, and our “estimated” amounts were all correct.  Amounts for 2019 IRC §4980H penalties are still shown as “estimated” because IRS has not yet released those for 2019.

Download a printable PDF

FICA tax on employers (total of Social Security + Medicare tax)7.65%7.65%No changeFICA tax on employees (total of Social Security + Medicare tax)7.65%7.65%No change

Health Savings Accounts (H.S.A.s):
IRC § 223(b)(2)(A)
2018 2019 Change
Maximum Annual Contribution – Individual Coverage $3,450 $3,500 + $50
Maximum Annual Contribution – Family Coverage $6,900 $7,000 + $100
Catch-up Contribution – age 55 and over IRC §223(b)(2)(A) $1,000 $1,000 No change
High Deductible Health Plan (HDHP): 

IRC § 223(c)(2)(A)

2018   2019   Change
Minimum Annual Deductible – Individual Coverage $1,350 $1,350 No change
Minimum Annual Deductible – Family Coverage $2,700 $2,700 No change
Maximum Out-of-Pocket Expenses – Individual Coverage $6,650 $6,750 + $100
Maximum Out-of-Pocket Expenses – Family Coverage $13,300 $13,500 + $200
Non-HDHP Health Plans (Not H.S.A.-Compatible)   2018   2019 Change
Maximum Out-of-Pocket Expenses – Individual Coverage $7,350 $7,900     +$550
Maximum Out-of-Pocket Expenses – Family Coverage $14,700 $15,800    +$1,100
Affordable Care Act Amounts 2018 2019    Change
Annual 5000A(c) penalty for individual not having “minimum essential coverage” (MEC):  greater of dollar amount or percentage of modified adjusted gross income (MAGI) $695 or 2.5% of MAGI $0   Goes to zero
Annual 4980H(a) penalty for large employer not offering MEC to at least 95% of full-time employees.  Multiply penalty amount by total number of full-time employees minus 30 $2,320

 

$2,500

(estimate)

+ $180
Annual 4980H(b) penalty for large employer not offering affordable minimum value coverage to all full-time employees.  Penalty amount is per each full-time EE who qualifies for a subsidy to buy insurance in the marketplace. $3,480 $3,750

(estimate)

+ $270
Affordability Percentage for Employer Shared Responsibility 9.56% 9.86% + 0.3%
Federal Poverty Line safe harbor Amount $96.72 $99.75 + $3.03
Federal Poverty Line – household size of one $12,140 Issued in January 2019 Not yet known
High Compensation Thresholds 2018 2019    Change
Highly Compensated Employee (HCE) Threshold

–  IRC §414(q)(1)(B)

$120,000 $125,000 +$5,000
Key Employee, Officer –  IRC § 416(i)(1)(A)(i) $175,000 $180,000 +$5,000
Social Security Taxable Wage Base   –  § 2230 of Social Security Act $128,400 $132,900 +$4,500
Qualified Small Employer HRA (QSEHRA) 2018 2019 Change
Maximum reimbursement from a QSEHRA – Individual $5,050 $5,150 +$100
Maximum reimbursement from a QSEHRA – Family coverage $10,250 $10,450 +$200
Medicare & Social Security 2018 2019 Change
Medicare Part B, Standard Monthly Premium $134.00 $135.50 +$1.50
Medicare Part B, Annual Deductible $183 $185 +$2.00
Medicare Part D – average basic premium.  (Part D sur-charges for most higher-income participants are also declining for 2019, amount varies based on income level) $32.50 $33.59 +$1.09
Health Flexible Spending Account (HFSA) Maximum Pre-Tax Contribution, & Dependent Care Assistance Plan (DCAP) 2018 2019 Change
HFSA, regardless of marital status  (Rev. Proc. 2018-57) $2,650 $2,700 +$50
Maximum exclusion for qualified adoption expenses through an Adoptions Assistance Program $13,840 $14,080 +$240
Maximum monthly fringe benefit limit for transit & parking $260 $265 +$5
DCAP if employee is married and filing a joint return or is a single parent filing as “House of Household”   –   IRC § 129 $5,000 $5,000 No change
DCAP if employee is married but filing a separate return from spouse $2,500 $2,500 No change
401(k), 403(b), Profit-Sharing Plans: 2018 2019    Change
Maximum Elective Deferrals (annually)   –  IRC § 402(g)(1) $18,500 $19,000 +$500
Catch-up Contributions     (for those age 50 and older) $ 6,000 $ 6,000 No change
Annual Compensation  Limits –  IRC § 401(a)(17) $275,000 $280,000 +$5,000
Annual Defined Contribution Plan Limits  –  IRC § 415(c)(1)(A) $55,000 $56,000 +$1,000
Individual Retirement Accounts (IRAs):         2018 2019 Change
IRA Contribution Limit $5,500 $6,000 +$500
IRA Catch-up Contributions (age 50 and older) $1,000 $1,000 No change

Guidance on 2019 Cost-of-Living-Adjustments:

Leave a Reply

Your email address will not be published. Required fields are marked *