FSA, HRA, HSA, COBRA, Insurance Payments

FSA Contribution Limit 2017, IRS Inflation Adjustments Affect FSAs

FSA Contribution LimitNewly released IRS inflation adjustments increase the FSA contribution limit in 2017.

The Internal Revenue Service (IRS) released its inflation adjustments for 2017, which affect more than 50 tax provisions, including several consumer directed healthcare (CDH) and employer-sponsored benefit accounts.

Those who participate in Flexible Spending Accounts (FSAs) and Transit accounts will see some changes.

Flexible Spending Accounts

The 2017 FSA contribution limit is increasing by $50 from the previous year. Employees with this employer-sponsored benefit account can contribute a maximum of $2,600.

For FSA plans with the carryover option, the limit remains the same at $500.

Transit Accounts

The aggregate fringe benefit exclusion for transportation in a commuter highway vehicle and any transit pass is limited to $255 per month. Parking remains at $255 per month.

In addition, the IRS also released information earlier this year regarding HSA contribution changes for 2017.

Health Savings Accounts

Individuals with an HSA will see a $50 increase in maximum pre-taxable contributions. In 2017, the Individual coverage contribution limit is $3,400.

Family coverage contribution limits remain the same at $6,750. Out of pocket expenses also remain the same for both individual and family coverage.

High Deductible Health Plans

For calendar year 2017, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.

The following chart addresses the contribution limits, minimum annual deductibles, and out-of-pocket expense limits for 2016 and 2017 for individuals and families.

2016 Individual Coverage 2017 Individual Coverage 2016 Family Coverage 2017 Family Coverage
Contribution limits $3,350  $3,400* $6,750 $6,750
Annual deductible $1,300 $1,300 $2,600 $2,600
Out-of-pocket expenses $6,550 $6,550 $13,100 $13,100

 

Learn more about 2017 IRS inflation adjustments.

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