Health FSA Contribution Limits
Effective January 1, 2013, employee pre-tax contributions to a Health FSA are capped at $2,500. The $2,500 cap is indexed to the Consumer Price Index (CPI) starting in 2014. Currently, the law does not limit the amount of employee pre-tax contributions to a Health FSA, although many employers specify limits as part of their Health FSA plan design.
Health FSA Contribution Limit Hot Topics & FAQs
- Does the limit take effect January 1, 2013, or the first plan year beginning on or after January 1, 2013?
Answer: The Department of Treasury has not yet published guidance on this issue. However, the statute does not reference a plan year. Therefore, it’s possible that participants of a non-calendar year plan may be impacted mid-year during the plan year that begins in 2012. Planning ahead, an employer may want to adopt the limit for the 2012 non-calandar year plan year.
- Are spouses who work limited to combined $2,500 Health FSA contribution?
Answer: No. Each employee is limited to a $2,500 Health FSA contribution per employer (or smaller amount if the employer’s plan has a lower limit).
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Additional Resources
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Video Tutorial
On changes impacting Section 125 plans -
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American Fidelity Assurance Company does not provide tax or legal advice.
