Important IRS Updates Contribution Limits & FSA Compliance
Important IRS Updates
Contribution Limits & FSA Compliance
The Internal Revenue Service announced the following new benefit plan limits for 2015. In addition, the IRS just issued an important change to Section 125 Cafeteria Plans. We’re notifying FSA clients about this change now. Health Savings Account (HSA) Limits
• 2015 HSA contribution limits are $3,350 for self-only coverage and $6,650 for family coverage.
• High deductible health plan deductibles are $1,300 for individuals and $2,600 for families. Out-of-pocket expenses cannot exceed $6,450 for individuals and $12,900 for families.
Flexible Spending Account (FSAs) Limits
• Healthcare FSA: The annual maximum for Healthcare FSAs has increased from $2,500 to $2,550 for 2015.
• Dependent Care FSA: At this time, the IRS has not released information on contribution limit changes to these plans.
• Transit & Parking FSA: Contribution limits remain unchanged for 2015. The monthly limits are $250 for parking, $130 for transit and $20 for bicycle commuting.
IRS Issues Notice 2014-55 Allowing Additional Permitted Election Changes to Health Coverage Under Section 125 Cafeteria Plans
The IRS just issued Notice 2014-55 to expand the permitted election rules for health coverage under a Section 125 cafeteria plan. There are now two situations in which a Section 125 cafeteria plan participant is permitted to revoke her/his election during a period of coverage:
• The first situation involves a participating employee whose hours are reduced so that the employee is expected to average less than 30 hours of service per week, but for whom the reduction does not affect the eligibility for coverage under the employer’s group health plan.
• The second situation involves an employee participating in an employer’s group health plan who would like to cease coverage under the group health plan and purchase coverage through a competitive marketplace established by the ACA Exchange or Marketplace.
We are in the process of notifying FSA clients regarding amendment to their plan documents, if they choose. Read more about this change in this release from the IRS.
As always, we hope this information is helpful.
Please contact us at firstname.lastname@example.org if you have questions or need more information.