2020 FSA Contribution Limits
The IRS has released the 2020 pre-tax dollar limits on employee contributions to employer-sponsored Healthcare Flexible Spending Accounts, Parking Benefit Accounts, Transportation Benefit Accounts and Adoption Assistance Accounts.
• The Healthcare FSA limit will increase to a maximum of $2,750 annually (up from $2,700 in 2019)
• The Commuter Benefits limit for mass transit and parking will increase to a maximum of $270 per month (up from $265 per month in 2019)
• The new maximum employee contribution to Adoption Assistance FSAs will increase to $14,300 (up from $14,080 in 2019)
• There has been no change to Dependent Care FSAs limits
It is important to note that unlike the pre-tax Healthcare FSA maximum, the limits under a Parking or Transportation Plan will include any employer contribution towards the Parking or Transportation Benefit. Therefore, any employer contribution reduces the amount an employee can elect as a pre-tax amount for his/her Parking and Transportation Benefits.
These plan changes are not automatic! Employers are still allowed to choose a lower limit for their FSA plans. If you would like to increase your limit for 2020: building in plan changes, making amendments to current plan documents, updating participant communications, and changes to employee 2020 elections (if open enrollment has already occurred) is required and will need to be completed very quickly.
BCC clients should contact their BCC Renewal Representative as soon as possible to make these changes!