Annually, the Internal Revenue Service (IRS) and Social Security Administration release cost-of-living adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index warranted increases in some benefits figures for 2020, including annual Health FSAs and Commuter Benefit contribution limits, which the IRS has just announced.
A brief overview on the recently announced changes for Health FSAs and Commuter Benefits is included below. For a summary and charts of all key 2020 figures that are of interest to employers and sponsors of benefit plans, please click here.
Health FSAs
The IRS has allowed an increase of $50 for plan years beginning on or after January 1, 2020. The new annual dollar limit for Health FSAs will increase to $2,750. Dependent Care FSA remains at $5,000.
Commuter (Parking and Transit)
Beginning January 1, 2020 the monthly limit for qualified transportation and parking benefits will increase to $270 per month. It was previously $265 for both transit and parking.
Thank you for your attention to this important compliance E-Alert. Please do not hesitate to reach out with any questions or concerns.
Employee Health and Benefits
ACA Compliance
