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.