A Few Adjustments for the New Year Ahead
Change is the one thing that seems to be a constant, and as we approach 2019, the federal government has announced the annual adjustments to the numbers that relate to our benefits. Whether you’re an employer, a participant in a health care or retirement plan, or a retiree, the new year will bring you changes that are likely to affect your costs and how much you can save.
Here are a few of the updated limits that are expected to impact most people:
- The deferral limits into 401(k), 403(b) and 457 retirement savings plans will increase from $18,500 to $19,000. Individuals over age 50 can continue making catch-up contributions of up to $6,000 into these plans.
- Contributions to Health Savings Accounts (HSAs) can increase in 2019 to a maximum of $3,500 for an individual and $7,000 for a family. An additional $1,000 contribution is allowed for those age 55 and older.
- If you participate in a Flexible Spending Account, the contribution for health care expenses will go up $50 in 2019, to a maximum of $2,700. Dependent care contributions remain at $5,000.
- The Employer Mandate under the Affordable Care Act (ACA) remains in effect and the penalties for employers will increase again for 2019. The “A” penalty (if an applicable large employer does not offer coverage to full time employees) will be $2,500. The “B” penalty (if an applicable large employer offers coverage that doesn’t meet minimum value and affordability requirements) will go up to $3,750.
- The ACA Affordability Threshold will increase from 9.56% to 9.86% of household income.
Medicare premiums, deductibles and coinsurance will be adjusted for 2019 as well. The Part B Medical Insurance premium will increase to $135.50 but the Part D Prescription Drug premium will go down $0.31 to $33.19. Under Part A Hospital Insurance, the hospital deductible will increase $6.00 to $1,346.00. Daily coinsurance for hospital stays exceeding 60 days and for skilled nursing facilities will have corresponding hikes.
These are just the highlights! There are many more details and numbers to go with them. We have published a Briefing showing the 2019 Health & Welfare benefit limits for your reference.