As usual, the IRS has announced changes to the contribution limits for flexible spending accounts (FSAs) in the coming calendar year. However, the timing creates a wrinkle that may keep some employees from taking full advantage.
Individuals may now contribute up to $2,750 to an FSA in calendar year 2020, a $50 increase from this year.
Related changes include an increase in the limit for the qualified transportation benefit (parking and transit passes), which now stands at $270 for 2020.
And maximum employer subsidies for qualified adoption expenses will see a $220 rise in the new year, increasing to $14,300.
The issue is that the announcement comes too late in the year for many employers, who have already produced their benefits materials for 2020. Making a change at this late date would require an addendum, which many will be reluctant to do. So don’t be surprised if the plan from any given employer continues the 2019 limits.
For information on 2020 limits for 401(k) plans, HSAs and more, see the infographic attached. And if you have any questions about this or other benefits issues, contact Consolidated Insurance.