November 16, 2018
Yesterday the IRS released Revenue Procedure 2018-57, which contains adjustments for various tax-related amounts that are indexed for inflation. As indicated in this guidance:
- The cap on health FSA salary reduction contributions for plan years beginning in 2019 has increased. The maximum amount participants may contribute to a health FSA, through salary reduction, during the 2019 plan year will be $2,700.
- The monthly limits on transit/commuter highway vehicle benefits and parking benefits for 2019 have increased to $265 per month of each type of benefit.
In light of these increases, employers should review the plan documents governing the health FSAs and/or transportation plans to determine whether these increases are automatically incorporated into the plans. It may be necessary to amend the plans to adopt the increased limits (if the plans do not automatically incorporate them and the employer intends to implement the increases in 2019) or reject the increased limits (if the plans automatically incorporate them but the employer does not wish to implement the increases in 2019).
If you have any questions or need assistance amending your plan, please contact us.