IRS increases 2019 contribution limits for health FSA and transportation plans
- Legal and Compliance
- All States
- Fully Insured and Self-Funded
The pre-tax contribution maximum for health flexible spending accounts (FSAs) — including limited purpose FSAs — will increase from $2,650 to $2,700 for plan years on or after Jan. 1, 2019. In addition, qualified transportation/transit and parking monthly limits in 2019 will increase from $260 to $265. There is no change in the Dependent Care FSA limits.
The IRS usually announces changes to contribution limits in October before the typical employee open enrollment period. Because this year’s announcement is coming after many open enrollments have closed, employers may choose whether to increase these maximum limits this year or wait until next year.
Unlike the pre-tax health FSA maximum, the limits under a transportation plan will include any employer contribution toward the parking or transit benefits. Any employer contribution reduces the amount an employee can elect as a pre-tax amount for their parking or transit benefits. Should a member who has elected an FSA want to take advantage of these new limits — even if their open enrollment period has closed — they can work with their HR representative to adjust their payroll deductions. However, members will not be able to elect an FSA if their open-enrollment period has closed.
If you would like to increase the contribution maximum for your employees, call your UnitedHealthcare representative for additional information.