2015 FSA Limit Increases

November 11, 2014

Employee Benefit & HR News

The IRS has announced new limits for FSA plans in 2015. The Affordable Care Act imposed a $2,500 limit (as index for inflation) on salary reduction contributions to health FSAs and the IRS has adjusted for inflation in 2015. For taxable years beginning in 2015, the dollar limitation is increased to $2,550.

As previously mentioned, the IRS has announced it will allow health FSA plans to offer a carryover feature of up to $500 in unused health FSA funds to the following year. The plan may continue to use a grace period giving employees a two and a half month extension to spend remaining FSA funds. However, FSA plans cannot have both the carryover and the grace period options, nor are they required to offer either of them.

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About Andie Schieler

Andie is an attorney and works in J.W.Terrill's Compliance division specializing in interpreting the Affordable Care Act and various insurance laws. She advises clients on legal and regulatory issues affecting their employee benefit plans. She obtained her law degree from Saint Louis University and undergraduate from Indiana University Bloomington.

View all posts by Andie Schieler

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