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Inflation-adjusted limits for FSA, HSA, QSEHRA, DCAP, more

The Internal Revenue Service has released 2019 annual inflation-adjusted limits for tax-favored employee benefits, including: Health Flexible Spending Arrangements (FSAs), Transit & Parking plans, Health Savings Accounts (HSAs), and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs).

Inflation-adjusted limits for FSA, HSA, QSEHRA, DCAP, more

Most allowances are eligible for annual cost-of-living adjustments (COLA). The sole exception is the catch-up allowance for HSAs, which remains at $1,000 from year-to-year.

Most 2019 inflation-adjusted limits for tax-savings benefit accounts increase from 2018 amounts with the exception of the Dependent Care FSA and the HDHP minimum deductible for HSAs).

Section 125 Cafeteria Plans

A Section 125 Cafeteria Plan begins with a basic Premium-Only Plan to pre-tax premiums and builds upon that with optional Flexible Spending Arrangements (Health, Limited, and Dependent Care FSAs) to cover out-of-pocket medical and dependent care expenses with pre-tax dollars and Health Savings Accounts (HSAs) that cover out-of-pocket medical costs plus build retirement savings with pre-tax salary deductions.

Here are the 2019 inflation-adjusted benefit limits for Cafeteria Plans, with historical information for comparison:

Health Flexible Spending Arrangement (FSA)
2019 2018 2017 2016
Contribution allowed (annual limit) 2,700 $2,650 $2,600 $2,500

 

Dependent Care Assistance Plan (DCAP) 2019 2018 2017 2016
Married filing separately (per spouse) $2,500 $2,500 $2,500 $2,500
Married filing jointly $5,000 $5,000 $5,000 $5,000
Single or Head of Household $5,000 $5,000 $5,000 $5,000

 

Health Savings Account (HSA)
HDHP Minimum Deductible 2019 2018 2017 2016
Individual coverage $1,350 $1,350 $1,300 $1,300
Family coverage $2,700 $2,700 $2,600 $2,600
HDHP Out-of-Pocket Maximum 2019 2018 2017 2016
Individual coverage $6,750 $6,650 $6,550 $6,550
Family coverage $13,500 $13,300 $13,100 $13,100
HSA Maximum Annual Contribution 2019 2018 2017 2016
Individual coverage $3,500 $3,450 $3,400 $3,350
Family coverage $7,000 $6,900 $6,750 $6,750
Catch-up allowance (age 55+) $1,000 $1,000 $1,000 $1,000

 

QSEHRA

The Qualified Small Employer Health Reimbursement Arrangement allows employers with fewer than 50 employees to provide assistance for the purchase of individual health coverage and out-of-pocket medical expenses. The QSEHRA is entirely employer funded and requires employees to purchase a health plan providing minimal essential coverage before reimbursements can be made from the plan.

Qualified Small Employer HRA (QSEHRA)
2019 2018 2017 2016
Individual Coverage $5,150 $5,050 $4,950 n/a
Family Coverage $10,450 $10,250 $10,000 n/a

 

Section 132 Commuter Plans

A Transit & Parking plan allows employees to set aside funds via pre-tax salary deductions to pay for transit passes, vanpooling, and parking necessary for them to work.

Transit & Parking Plan
2019 2018 2017 2016
Parking expense (per month) $265 $260 $255 $255
Transit expense (per month) $265 $260 $255 $255

 

Section 137 Adoption Plans

Employers help adoptive parents offset the expense of adopting a child with a Section 137 Adoption Assistance Plan.

Adoption Assistance Plan
2019 2018 2017 2016
Adoption expenses (annual limit) $14,080 $13,840 $13,570 $13,460
Tax credit phase-out begins (MAGI) $211,160 $207,580 $203,540 $201,920
Tax credit ends (MAGI) $251,160 $247,580 $243,540 $241,920

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