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Health FSA Limit will Increase for 2019


For taxable years beginning in 2019, the IRS dollar limit for employee health Flexible Spending Account (FSA) contributions is increased to $2,700. The health FSA dollar limit is on an employee basis; therefore, each employee may only elect up to $2,700 regardless of any additional family members who may benefit from the use of health FSA funds. Eligible family members may open their own FSA with a separate $2,700 limit. For example, a husband and wife who each have their own health FSA may each make contributions of up to $2,700. 

As a reminder, the IRS employee contribution limit for dependent care accounts will continue to be $5,000 ($2,500 if married and filing taxes separately). 

What Employers Need to Know

Employers may impose their own dollar limit on employees' contributions to health FSAs so long as it does not exceed the IRS limit for the taxable year.  However, employers who plan to allow employees to contribute up to the IRS dollar limit ($2,700) should communicate the new limit to employees for 2019 as part of the open enrollment process. Employers should also consult with their broker/carrier to make sure that plan documents specify the health FSA dollar limit that will be used for 2019. 

Click here  for additional information.

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