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Nov 2018
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November 26, 2018

Key Benefit Plan Limits for 2019

The IRS recently released its 2019 employee benefits limitations for retirement plans. The following chart lists common limitations relevant for many employers. These limits are calendar year limits, except as otherwise noted. If you have questions about how these limits could impact you or your organization, please contact your Warner attorney or a member of our Employee Benefits Practice Group.  
 
  2019 2018 2017
401(k), 403(b), 457(b), Pension, etc.
Annual Compensationi $280,000 $275,000 $270,000
Elective Deferrals 19,000 18,500 18,000
Catch-up Contributions 6,000 6,000 6,000
Defined Contribution Limitsii 56,000 55,000 54,000
Defined Benefit Limitsiii 225,000 220,000 215,000
HCE Thresholdiv 125,000 120,000 120,000
Key Employeev 180,000 175,000 175,000
ESOP Five-Year Distribution Threshold 1,130,000 1,105,000 1,080,000
ESOP Additional Year Threshold 225,000 220,000 215,000
IRA
IRA Contribution Limit (Traditional or Roth) $6,000 $5,500 $5,500
IRA Catch-Up Contributions 1,000 1,000 1,000
IRA AGI Deduction Phase-Out Starting at
Joint Return $103,000 $101,000 $99,000
Single or Head of Household 64,000 63,000 62,000
SEP
SEP Minimum Compensation $600 $600 $600
SEP Maximum Contribution 56,000 55,000 54,000
SEP Maximum Compensation 280,000 275,000 270,000
SIMPLE Plans
SIMPLE Maximum Elective Deferrals $13,000 $12,500 $12,500
Catch-Up Contributions 3,000 3,000 3,000
Other
457 Elective Deferrals $19,000 $18,500 $18,000
Control Employee (board member or officer) 110,000 110,000 105,000
Control Employee (compensation-based) 225,000 220,000 215,000
Taxable Wage Base 132,900 128,400 127,200
Health Plans
HSA Out-of-Pocket Maximums (Self-Only) $6,750 $6,550 $6,550
HSA Out-of-Pocket Maximums (Other than Self-Only) 13,500 13,300 13,100
HSA Minimum Deductible (Self-Only) 1,350 1,350 1,300
HSA Minimum Deductible (Other than Self-Only) 2,700 2,700 2,600
HSA Maximum Contribution (Self-Only) 3,500 3,450 3,400
HSA Maximum Contribution (Other than Self-Only) 7,000 6,900 6,750
HSA Catch-Up Contribution 1,000 1,000 1,000
ACA Out-of-Pocket (Self-Only)vi vii 7,900 7,350 7,150
ACA Out-of-Pocket (Other than Self-Only)vi vii 15,800 14,700 14,300
Health FSA Salary Reduction Capviii 2,700 2,650 2,600
Employer Shared Responsibility - 4980H(a) Failure to Offer Coverage)vii ix TBD 2,320 2,260
Employer Shared Responsibility - 4980H(a) Failure to Offer Affordable, Minimum Value Coveragevii ix TBD 3,480 3,390
ACA Affordability Percentage 9.86% 9.56% 9.69%
In addition, the Patient Protection and Affordable Care Act imposes a fee to help fund the Patient Centered Outcomes Research Institute (PCORI). For plan years ending (1) between Oct. 1, 2016 and Sept. 30, 2017, the PCORI fee is $2.26; (2) on or after Oct. 1, 2017, and before Oct. 1, 2018, the PCORI fee is $2.39; and (3) on or after Oct.1, 2018 and before Oct. 1, 2019, the PCORI fee is $2.39 plus inflation. The PCORI fee is effective for plan years ending before Oct. 1, 2019.
 
i. The plan defines whether compensation is measured on a Plan Year or Calendar Year basis. The 2019 limit applies for the year beginning in 2019. 
ii. The 2019 defined contribution limit applies to the Limitation Year, as defined by the plan, ending in 2019.
iii. The 2019 defined benefit limit applies to the Limitation Year, as defined by the plan, ending in 2019.
iv. The HCE threshold is based on prior year compensation, which can either be the preceding Plan Year or calendar year (“lookback year”), as elected by the plan. If the Plan Year is used, the dollar threshold is the threshold for the calendar year in which the Plan Year for which the compensation is measured begins. For example, for a plan with a calendar year Plan Year, an employee is an HCE in 2019 if she had compensation in excess of $120,000 for 2018 (the dollar threshold for the lookback year). But if the Plan Year is July 1 – June 30, an employee is an HCE for the Plan Year beginning July 1, 2019 if the employee had compensation in excess of $120,000 for the Plan Year beginning July 1, 2018. If a non-calendar year plan has made a calendar year election, the lookback year is the calendar year beginning in the prior Plan Year. For example, for a plan with a July 1 – June 30 Plan Year and a calendar year election, an employee will be an HCE for the Plan Year beginning July 1, 2019, if he had compensation in excess of $125,000 in 2019.
v. The compensation used for determining whether an officer is a Key Employee is determined using the calendar year dollar amount in which the Plan Year begins. For example, to identify key employees for a Plan Year beginning July 1, 2019, the plan looks at whether compensation for that Plan Year exceeds $180,000.
vi. These limits do not apply to grandfathered or retiree-only plans.
vii. These amounts are indexed to increase based on the average per capita premium for U.S. health insurance coverage from the prior calendar year. The Out-of-Pocket maximum limit for self-only coverage applies to all individuals (regardless of whether the individual is in self-only or another level of coverage). For example, a family plan with a $14,700 family Out-of-Pocket limit cannot have cost sharing exceeding $7,350 for an individual enrollee in the plan. 
viii. These fees apply on a plan year basis and are indexed for CPI-U.
ix. These fees apply on a calendar year basis and are assessed monthly at 1/12 of the annual amount.

 

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