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 Contributionsii | 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 | 1,000 |
| 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.