IRS Releases New Cost-of-Living Adjusted Limits and PCORI Fees for 2019

Most people are aware that there are annual increases in Social Security benefits to offset the adverse effects of inflation on fixed incomes. The Internal Revenue Service and Social Security Administration announced cost of living adjustments applicable to dollar limitations for qualified retirement plans, and other limits for tax year 2019. Some limits provided below remain unchanged from 2018.

The Social Security Wage base increased from $128,700 to $132,900. The earnings limit for workers who are younger than “full” retirement age (age 66 for people born in 1943 through 1954) will increase to $17,640. The earnings limit for people turning 66 in 2019 will increase to $46,920. There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

The new limits are provided below:

2019 limits reflect issuance of IRS Notice 2018-83 (November 1, 2018) and Social Security Administration Face Sheet (October 2018).
IRS Updates PCORI Fee

In Notice 2018-85, the IRS that the adjusted applicable amount for the Patient-Centered Outcomes Research Institute (PCORI) Fee. Plans ending on or after October 1, 2018 has been raised to $2.45 from $2.39.The fee is adjusted each year for inflation. However, the program ends in 2019 and PCORI fees will not apply for plan years ending after September 30, 2019.

About the PCORI fee

The patient-centered outcomes research (PCORI) fee is imposed on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans for policy and plan years ending on or after October 1, 2012. This generally applies to employers who are self-insured. Employers who purchase insurance through a third party carrier are generally not responsible for the PCORI form.

The fee is also owed if employers contributed to employees’ health reimbursement arrangements (HRAs) last year or to health flexible spending accounts (FSAs) unless certain exceptions were met. The fee does not apply to health savings accounts.

This form and the fee are due each year by July 31.

The IRS Notice 2018-83 can be viewed at:

https://www.irs.gov/pub/irs-drop/n-18-83.pdf

The Social Security Fact Sheet can be viewed at:

https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2019.pdf

For a copy of the Notice 2018-85, please click on the link below:

https://www.irs.gov/pub/irs-drop/n-18-85.pdf

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