Every year the benefits industry is inundated with a series of ever-changing numbers your employees must attempt to keep straight. Next year, due to the recent tax overhaul, there are even more numbers for your staff to remember.
But, luckily for you, The Olson Group is here to tell you what these numbers are and why they matter to you and your employees. In this article, we’ll tell you the 19 benefits numbers you need to know for your 2019 employee benefits plan. Below you’ll find these 19 employee benefits plan numbers separated into three categories. Numbers related to taxes, retirement and health benefits.
Tax Numbers to Know
1. Annual Exclusion for Gifts
The annual exclusion for gifts is the same for the calendar year 2019 as it was for last year at $15,000.
2. Estate Tax Exclusion
Estates of decedents who die during 2019 will have a basic exclusion amount of $11,400,000. This total is an increase from last year’s total of $11,180,000 for estates of decedents who died in 2018.
3. Earned Income Credit
The maximum earned income credit amount for 2019 is $6,557 for taxpayers who are filing jointly or have three or more qualifying children. This amount is an increase from the 2018 limit of $6,431.
4. Tax Rates
There are seven tax rates for the 2019 tax year:
- 37 percent for individual single taxpayers with incomes greater than $510,300 ($612,350 for married couples filing jointly)
- 35 percent for incomes over $204,100 ($408,200 for couples)
- 32 percent for incomes over $160,725 ($321,450 for couples)
- 24 percent for incomes over $84,200 ($168,400 for couples)
- 22 percent for incomes over $39,475 ($78,950 for couples)
- 12 percent for incomes over $9,700 ($19,400 for couples)
- 10 percent for single individuals with incomes of $9,700 or less ($19,400 for couples)
5. Standard Deduction
The standard deduction, for those married and filing jointly will rise to $24,400 for the tax year 2019, up $400 from 2018. For single taxpayers or married individuals filing separately, the standard deduction will rise to $12,200 for 2019, up $200 from the previous year. Finally, for heads of households, the standard deduction for 2019 will be $18,350, up $350 from 2018.
Retirement Numbers to Know
6. Pre-Tax Contribution Limits for 401(k)
The pre-tax contribution limits for employees who participate in a 401(k), 403(b), and most 457 plans increased for 2019 to $19,000. This number is an increase of $500 from the previous year. The new contribution limit also applies to the federal government’s Thrift Savings Plan.
7. Catch-Up Contribution Limits for 401(k)
Employees participating in a 401(k), and who are ages 50 and over, can contribute an additional $6,000 for 2019. This catch-up limit is the same as it was in 2018.
8. IRA Contribution Limits
Contribution limits for IRAs are being raised to $6,000 for 2019. Next year’s limit is an increase of $500 from the previous year and the first increase in contribution limits since 2013. Note: the catch-up contribution limit for people 50 and over will remain at $1,000.
9. Social Security COLA
Social security recipients will receive an increase of 2.8 percent as a cost-of-living adjustment, for 2019. This percentage marks the largest COLA increase since 2012. The estimated increase for the average social security beneficiary is $39 a month or $468 a year.
10. Maximum Monthly Payout
The maximum monthly amount a retired worker, at full retirement age, can make from social security is $2,861 for 2019. This is a monthly increase of $73 a month, or $876 a year from 2018.
Health Numbers to Know
11. Annual HSA Contribution Limit for Individuals
The annual health savings account contribution limit for individuals with single medical coverage in 2019 is $3,500. This represents a $50 increase from the previous year.
12. Annual HSA Contribution Limit for Families
For HSAs linked to family health coverage in 2019, the contribution limit is $7,000. An increase of $100 from 2018.
13. HDHP Minimum Deductible for Individuals
The minimum deductible for a qualifying high-deductible health plan will remain $1,350 for individual coverage. This amount is the same as it was last year.
14. HDHP Minimum Deductible for Families
Similarly, the minimum deductible for a qualifying high-deductible health plan for family coverage will remain the same for 2019 as it was for 2018, at $2,700.
15. HDHP Maximum Out-of-Pocket Amounts for Individuals
For those with individual coverage in 2019, the maximum limit for out-of-pocket costs will increase to $6,750. Up $100 from 2018. Note: Out-of-pocket costs include deductibles, copayments, and other amounts used for healthcare, but don’t include premiums.
16. HDHP Maximum Out-of-Pocket Amounts for Families
Out-of-pocket costs that don’t include premiums will have a maximum limit of $13,500 for family coverage. This is an increase of $200 from the previous year.
17. HSA Catch-Up Contributions
Those who are 55 years or older can contribute an extra $1,000 to their health savings account in 2019, the same as it was for 2018.
18. FSA Contribution Limit
The maximum contribution limit for a health flexible spending account is $2,700 for 2019. This marks an increase of $50 from the prior year. It’s important to note this increase also applies to limited-purpose FSAs, which are restricted to dental and vision care services, and can be used in tandem with HSAs.
19. No Penalty for a Lack of Health Coverage
The dollar amount used to determine the penalty for those not maintaining minimum essential health coverage is zero, per the tax overhaul passed in 2017. This penalty’s amount was $695 in 2018.
The employee benefits industry is a constantly evolving landscape. And ensuring your firm’s compliance is a must for every employer. As you traverse through the 2019 plan year, make sure to keep these 19 numbers in mind so you can make your best employee benefits plan possible.