April 02, 2019
Individuals who were HSA eligible in 2018 have until the tax filing deadline to make or receive contributions. Thus, 2018 HSA contributions must generally be made by April 15, 2019. This includes employer contributions. The 2018 contribution limit is $3,450 for self-only coverage and $6,900 for any tier of coverage other than self-only. Those aged 55 and older are permitted an additional catch-up contribution of $1,000. An individual’s maximum annual contribution is limited by the number of months they were eligible for the HSA.
There is an exception to this rule. An individual that was HSA eligible on December 1, is permitted to contribute the full statutory maximum for the year. However, if eligible employees do not remain HSA eligible through December of the following year, they may experience tax consequences.
Individuals who contributed more than the allowable amount for 2018, should be refunded the excess contributions and associated interest by April 15, 2018. The excess would be subject to income tax. If the excess is not refunded from the account, it will not only be subject to income tax, but also a six percent excise tax penalty. If an employer is aware of an employee who was not eligible for a contribution or who has contributed more than the allowable amount for 2018, they should work with the HSA bank/trustee to process the excess contribution.