2015 Flexible Spending Account Limits Increased!

The IRS just recently announced that the 2015 employee election limit for medical Flexible Spending Accounts (FSA) will be $2,550.  This is a $50 increase from the 2014 limit. You can read the full IRS announcement here. This change applies to plan years starting on or after January 1, 2015.

Employers may chose to set their medical FSA election maximum to $2,550 for the 2015 plan year though not required by law.  Employers will need to amend their plan documents for 2015 no later than December 31, 2014 to indicate that $2,550 will be the new maximum election for their FSA plan offering.

Some important reminders regarding the $2,550 2015 FSA maximum:

  • The limit applies to employee salary reduction FSA contributions only. Employers may choose to contribute to an FSA in excess of the maximum.
  • The limit applies to the FSA plan year vs. calendar year.
  • The limit is on a “per account” basis. If a husband and wife both have access to an FSA through their respective employers, they could each contribute $2,550 in 2015, resulting in a household FSA contribution of $5,100.

Please contact your account management team if you have questions about making this change for your employees in the upcoming year.

FSA Contribution Limits 2012

IRS 2012 Flexible Spending Account Limits

HR Concepts has reviewed the new IRS rules and regulations as they pertain to the upcoming limitations for salary reduction contributions to Flexible Spending Accounts starting January 1, 2013. Health FSA plans that allow contributions in excess of $2,500 must ensure that total contributions occuring in 2013 do not exceed the $2,500 limit. As a result, we are recommending each of our clients implement no more than the $2500 limitation on all plans starting on or after February 1, 2012. This recommendation is based upon the potential issues that may arise when trying to address the challenges of maximum deductions entering 2013 with a non-calendar plan year. In order to simplify the transition to this new limitation we at HRC believe it is important to set the proper expectation as to how the plan will function. By implementing the limitation on all plans now, you will avoid employee confusion and plan disruption. Like all plan changes these new limits will be included on your plan documents prepared by HR Concepts. If you have any questions or concerns please do not hesitate to contact your account executive team at 603-647-1147 option 2.

Medical Flexible Spending Accounts and Over The Counter (OTC) Expenses

What you need to know about Healthcare Reform and your FSA account

  1.  As of January 1, 2011, there are changes occurring in reference to OTC purchases and the use of your Medical Flexible Spending Account.  These changes are part of the Patient Protection and Affordable Care Act signed into law on March 23, 2010.
  2. Many OTC medicines and products will no longer be eligible for reimbursement without a doctor's prescription or Medical Necessity Form.
  3. If you are currently enrolled and using the HRC Total Access Card for your OTC medical expenses, you will no longer be able to use the card for certain expenses once the law takes effect on January 1.
  4. OTC items that are no longer eligible to be put on the card will need to be submitted manually.
  5. In order to be reimbursed manually for certain OTC medicines and products you will need a signed prescription from your doctor or have a Medical Necessity Form filled out.  The additional documentation required for submission will need to be sent to HR Concepts before the claim can be processed and paid in their system.   

The following OTC items are examples of items that require a doctor's prescription or Medical Necessity Form: 

  •     Acid Controllers                                   
  •     Digestive Aids
  •     Allergy & Sinus
  •     Feminine Anti-Fungal/Anti-Itch
  •     Antibiotic Products
  •     Hemorrhoid Preps
  •     Anti-Diarrheal
  •     Laxatives
  •     Anti-Gas
  •     Motion Sickness
  •     Anti-Itch & Insect Bite Pain Relief
  •     Anti-Parasitic Treatments
  •     Respiratory Treatments
  •     Baby Rash Ointments/Creams
  •     Sleep Aids & Sedatives
  •     Cold Sore Remedies
  •     Stomach Remedies
  •     Cough, Cold & Flu Meds

The following list of OTC items is an example of items that are still eligible for purchase and will not require additional documentation: 

  •     Band Aids, Elastic Bandages & Wraps
  •     Birth Control
  •     First Aid Supplies
  •     Braces & Supports
  •      Insulin & Diabetic Supplies
  •     Catheters
  •     Ostomy Products
  •     Contact Lenses and contact lens solution
  •     Reading Glasses
  •     Denture Adhesives
  •     Wheelchairs, Walkers, Canes
  •     Diagnostic Tests & Monitors  

HRC will continue to update materials and our web site to keep all of our participants informed of any additional changes based upon the Health Care Reform legislation.


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