It’s the season when health care and retirement plans are re-evaluated, and as usual there are changes in the wind as the New Year approaches. Here’s a look at what the IRS has announced about revisions to plan limits in 2021, all effective as of January 1.
HSAs/HDHPs: Health Savings Accounts and High Deductible Health Plans will see changes to contribution limits, minimum deductibles and maximum out-of-pocket expenses as follows:
- Maximum HSA contributions for individuals will rise by $50, from $3,550 to $3,600. For families the limit will rise by $100, from $7,100 to $7,200.
- Minimum deductible amounts for HDHPs remain unchanged at $1,400 for self-only and $2,800 for family coverage.
- HDHP maximum out-of-pocket expense does rise in 2021, to $7,000 for individuals and $14,000 for families.
FSAs: For those with health flexible spending accounts (FSAs), the dollar limit for salary reduction contributions will remain unchanged in 2021, at $2,750. Employers may continue to impose their own dollar limits, but should be sure to communicate their 2021 limit to employees as a part of the enrollment process.
Retirement Plans: Most limits here remain unchanged as well, including all of these:
- Employee contribution limit for 401(k) plans: $19,500
- Employee contribution limit for IRAs: $6,000
- Employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans: $13,500
- Limits used to define a “highly compensated employee” and a “key employee:” $130,000 and $185,000, respectively
These types of plans will see increased limits:
- Defined contribution plans: the annual limit increases to $58,000
- The annual compensation limit applicable to many retirement plans rises to $290,000 (from $285,000)
Questions about changes in your benefits plan for 2021? Contact Consolidated Insurance.