HSA: 2019 Limits And Frequently Asked Questions

This post was written by Hannie Spitzack, HSA Sales Relationship Manager at BPAS.

With 2019 fast approaching, now is the time for employers to get in front of their employees to inform them of the new HSA limits for the upcoming year.  

With open enrollment season approaching, sharing this information with employees now will allow them time to reevaluate their current contribution level to their HSA and to review their investment performance.

New HSA Limits for 2019

In the early part of 2018, the IRS released the new HSA limits for 2019*. For single-only coverage, the limit is increasing by $50, bringing the new 2019 limit to $3,500, and for a family, the limit is increasing by $100, bringing the 2019 limit to $7,000.

The 55+ catch-up limit will remain the same at $1,000 for both single and family. These limits include employer contributions made to an employee’s account.

*Please reference the chart below for the new 2019 contribution limits, minimum HDHP deductibles, and the maximum HDHP out-of-pocket.

Frequently Asked Questions About HSAs

Here at BPAS, we understand that knowledge is key when it comes to understanding HSAs.  Below are a few FAQs that can help advisors, employers, and employees better understand HSAs.

Q:  What is an HSA?

A:  An HSA is a tax-advantaged medical savings account paired with a qualified high deductible plan (HDHP) used to pay for qualified medical expenses.

Q:  How does an HSA work?

A:  Contributions are made to the HSA with payroll deductions through an employer. The amount of pay put into an HSA won’t count as taxable income, so there will be immediate tax savings. Plus, the HSA accumulates investment returns. The money in the HSA is then used to pay for qualified medical expenses.

Q:  Who owns the HSA account?

A:  The employee

Q:  Who can contribute to an HSA?

A:  The employee and/or the employer can make contributions. Employers may contribute to the HSA as long as the total contributions between the employee and the employer do not exceed the IRS limits.

Q:  What are the advantages for an employer to offer an HSA?

A:  Paired with a qualified HDHP, HSAs can result in significant savings for employers. HDHPs typically come with lower insurance premiums, allowing employers to contribute those premium savings to their employees’ HSAs if they choose to.

Q:  Does the money in an HSA roll over from year to year or do the participants lose it?

A:  The money contributed and any interest earned rolls over from year to year if not used.  There is no “use it or lose it” rule with HSAs.

Q:  Can the money in an HSA be invested?

A:  Yes. At BPAS, our Roadways HSA offers first-dollar investing. With our open architecture platform, employers can have their financial advisor choose the fund lineup or use the default funds provided by BPAS. For employers who also have a defined contribution retirement plan at BPAS, a similar fund lineup may be available to the HSA.

Q:  Who is BPAS?

A:  BPAS is a national provider of retirement plans, benefit plans, fund administration, and collective investment trusts. We support 3,800 retirement plans, $77 billion in trust assets, $1 trillion in fund administration, and more than 400,000 participants. With our breadth of services, depth of creative talent, and financial resources, we are well positioned to help our clients solve their benefit plan challenges without the need to engage multiple providers. One company. One call.

Q:  How can the BPAS Roadways HSA make employers’ and employees’ lives easier?

A:  With BPAS Roadways HSA administration, employers save money. With the tax advantages of an HSA, contributions (employer and employee) are made pre-tax, earnings are tax-free, and distributions for eligible expenses are tax-free; employees can save more money for retirement and potentially make money by investing those savings.  

The Roadways HSA is a vertically integrated HSA solution with the recordkeeper, administrator, clearing firm, custodial, and customer services under one company. Our platform provides a cost-effective and worry-free HSA program solution with efficiency, operational accuracy, superior customer service, and the highest levels of security.

Q:  How can I learn more about the BPAS Roadways HSA?

A:  You can contact Hannie Spitzack, our HSA Sales Relationship Manager, at [email protected], or call 1-866-401-5272.